State lawmakers fell behind their self-imposed goals for when they hoped to get a spending plan out of the Legislature and onto Gov. Phil Murphy’s desk.
Under the initial tentative timeline, lawmakers were looking to pass the state’s Fiscal Year 2022 budget out of committee on June 17 and then approve it by the full floor next week, likely during the June 21 voting session. Now that entire process, including the actual public introduction of what lawmakers would like to see in the spending plan, will happen at some point next week.
“It is my hope that we will have a budget bill that will be introduced on Monday, the 21st, and I’ll work on scheduling, but I’m assuming some time that week – Tuesday, Wednesday – we will be in committee here to do the budget bill,” Senate Budget Chair Paul Sarlo, D-36th District, said during the June 17 Senate hearing.
Republicans and good government advocates have been critical of what they say is an opaque budget process, especially with the state unusually flush with cash.
As it stands, Murphy’s proposal calls for a record-high $44.8 billion spending plan to cover expenses between July 1 and June 30, 2022. Murphy has until June 30, 2021, to sign a budget or he would need to order a state shutdown.
“It’s never done until it’s done,” Senate President Stephen Sweeney, D-3rd District, told reporters before the start of the Senate Budget and Appropriations Committee, where the budget would have initially been heard.
The state has $6.2 billion in federal aid from the Biden administration and a projected $10 billion surplus. The decision on how that is spent could come down to what agreements are struck in private between top lawmakers and Murphy. Federal rules dictate that the aid could only be used on COVID expenses and for making up for tax revenue lost during the pandemic.
This year’s budget efforts are complicated by unexpected surges in tax revenue, driven by $4 billion of new debt, billions in federal COVID-relief, and pandemic-driven surges in consumer spending.
One issue has been whether to put more money into the state’s pension payments, beyond the $6.4 billion Murphy proposed.
“We talked about it, and it’s still on the table, increasing the amount. Again it’s not done until it’s done but I don’t think there’s opposition to putting more money in the pension,” the Senate President added.
Another issue being worked out was debt defeasance – Sweeney said – or where in the case of New Jersey, the state would use some of the surplus to pay for older and more expensive debt.
According to NJ Globe, talks were underway for increases to school aid, the Homestead rebate and business aid.
But with Murphy’s seat and all 120 members of the state Legislature up for reelection, public-facing relations between Murphy and top lawmakers – like Sweeney and Assembly Speaker Craig Coughlin, D-19th District – have been mellow.
Negotiations have been going on behind closed doors, but without the political back and forth seen in typical budget years.
All told, the state’s closing balance over the next year is expected to come in at nearly $5.2 billion over what state officials previously expected, completely defying last year’s expectations of a total economic meltdown amid the COVID-19 pandemic.
According to the New Jersey State Treasury Department, the state is looking at a closing balance of $10.1 billion, up from the $6.3 billion projected in April, which itself was up from the $2.5 billion forecast in October.
But the New Jersey Treasury Department canceled last week’s hearings and instead submitted written updates to members of both houses.
“We cannot fathom what you are trying to hide by refusing your traditional responsibility to provide revenue updates,” reads a June 9 letter from the state Assembly GOP members to Murphy and New Jersey State Treasurer Elizabeth Maher Muoio. “There are only two possibilities that come to mind: that your administration is woefully unprepared to explain how you plan to spend the newly expected money and the more than $6 billion in federal aid, or your disdain for transparency and the legislative process satiates your hunger for unilateral power.”