Gov. Phil Murphy signed into law the three-month budget extension brought on by the coronavirus on June 30, one that features a series of cuts and spending deferrals.
State officials agreed to extend the fiscal year beyond the traditional closing date to Sept. 30 from June 30 due to the uncertainty caused by the global pandemic and the subsequent decision to extend state and federal tax filing deadlines to July 15 to help taxpayers weather the COVID-19 crisis.
“The fiscal impacts of the COVID-19 pandemic are as unprecedented as this public health emergency itself,” said Murphy. “As we move forward toward the nine-month Fiscal 2021 budget, our choices will have an even bigger impact.
$7.6 Billion Budget
The $7.6 billion spending plan signed is relatively unchanged from the proposal the Murphy Administration put forth in May. It authorizes the deappropriation of nearly $1.2 billion, removes nearly $850 million in new spending proposed in the governor’s February budget message, defers a number of significant payments and does not include any new revenue raisers.
“We have been working around the clock since this crisis hit to get a handle on the state’s continuously evolving finances,” said State Treasurer Elizabeth Maher Muoio in a press statement. “The one certainty forecasters can agree on at this point is that uncertainty lies ahead and we must prepare for that. Unfortunately, this means we must brace ourselves for more painful decisions on the road ahead.”
The supplemental appropriations bill includes a 5% across-the-board reduction in funding for non-salary operating costs, a 10% reduction in discretionary grants and savings from delaying cost-of-living adjustments as part of the agreement negotiated with the Communications Workers of America union.
Projected Revenues Rise
The three-month spending plan provides sufficient funds to support the projected needs for social services programs through the end of September and 25% of the annual need for operating costs that were not otherwise reduced.
The financial bill is supported by $8.6 billion in total resources, and ends with a surplus of $956 million through Sept. 30. The revised surplus—which includes the transfer of the entire $421 million Surplus Revenue Fund to the General Fund —is up $462 million from the May 22 budget update.
The governor noted the improved revenue forecast is primarily due to sales and use tax revenue exceeding expectations as a result of the incremental re-opening of New Jersey’s economy.
More Aid Needed
Murphy at his press briefing on June 30 continued his case for borrowing, which is awaiting action in the state Senate, and federal money.
According to he first-term Democratic governor, “While the tough decisions we’ve made now will see us through the next 91 days, they will pale in comparison to those which lay just around the corner if we do not have greater financial flexibility.”
“We cannot just cut our way forward,” continued Murphy. “We must have the flexibility to borrow essential funds to secure the core services we will rely upon as we emerge from this pandemic, and we need direct assistance from the federal government.”
