New Jersey finds itself with billions of extra funds in the state budget
New Jersey lawmakers are dealing with an unexpected challenge – there is more money in this year’s budget than they originally expected.
New Jersey is slated to receive $6.6 billion in federal stimulus money. There is about $600 million extra from higher-than-expected income and business tax collections. And more than $4 billion from borrowing.
With all of the extra funds, the Democratic head of the state budget committee is talking about investments over the next two or three years.
“We have the federal funds, we have the borrowed money. The question is: Let’s not look back. Let’s make sure we wisely invest these funds going forward,” says Budget Committee Chairman state Sen. Paul Sarlo.
In addition to paying down debt and paying into the pension system for police, firefighters and teachers, Sarlo says that this money could be used to invest in New Jersey neighborhoods.
“Education funding. By far education funding goes right into their neighborhoods. Right into their communities, the property tax relief fund,” Sarlo says.
But Republicans questioned why Gov. Phil Murphy and the Legislature still borrowed $4 billion last November to balance the budget.
“Even though Gov. Murphy promised the debt would be retired early if revenue exceeded expectations, or if federal money became available to help the state. Both those things happened, yet here we are, as New Jerseyans and the 9 million New Jersey taxpayers are stuck with 12 years of debt payments,” says Republican state Sen. Mike Testa.
State Treasurer Elizabeth Muoio says that it was the right decision at the time. She says that her department didn’t realize that their revenue predictions were off until January.
“A forecast is a forecast of what is expected, at that time when that certification was made, that was the correct forecast,” she says.
Sarlo says that he agrees.
“The way you work yourself through a crisis sometimes is making an investment in your state or your economy. And this budget does that,” he says.
The $4.3 billion in borrowing cannot be reversed, because it was done through nonrefundable bonds.