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NJ Spotlight: NJ fiscal picture $430M better, analysts say
By John Reitmeyer
Despite the ongoing pandemic, New Jersey will close out its fiscal year in a few months with even more revenue than Gov. Phil Murphy’s administration has recently forecast, according to new estimates from the nonpartisan Office of Legislative Services obtained by NJ Spotlight News.
These latest estimates add nearly $430 million to the total revenue the Murphy administration projected in its most recent forecast for the 2021 fiscal year, which closes at the end of June.
The new revenue estimates are due to be reviewed by lawmakers for the first time Tuesday, and they’re just the latest to reflect an ever-brightening fiscal outlook for the state in the face of the health crisis.
Lawmakers are also scheduled Tuesday to hear from state Treasurer Elizabeth Maher Muoio for the first time since Murphy proposed a record-high, $44.8 billion spending plan for the 2022 fiscal year, which begins on July 1.
Also scheduled to be up for discussion during the budget hearings is how the state has been using the billions of dollars in COVID-19 relief received from the federal government over the last year.
What to do with $6B, latest federal aid?
New Jersey is due to receive more than $6 billion under the latest federal aid package, and members of the state’s business community suggested during a news conference Monday a number of ways that aid should be used.
“The state is very fortunate to have this level of assistance coming to us, but it’s all going to be for naught if not spent responsibly with an eye towards the need for immediate relief, as well as long-term leveraging of the dollars,” said Christina Renna, president and CEO of the Chamber of Commerce of Southern New Jersey.
New Jersey suffered hefty revenue losses at the onset of the pandemic, which triggered an economic downturn as well as a health crisis. As a result, the Murphy administration pulled back about $1 billion in appropriated spending last year, including funding for property-tax relief for seniors and people with disabilities, as the losses swamped the state’s budget reserves.
The Murphy administration also projected significant losses would continue into the current fiscal year and proposed emergency borrowing to help fill the gap.
While the OLS’ forecasts were more optimistic, majority Democrats in both houses of the Legislature eventually signed off on the Democratic governor’s borrowing plan over Republican objections. And in late November, the administration raised more than $4 billion in revenue through the issuance of general obligation bonds that must be paid off within 12 years.
But the state’s outlook has significantly brightened in recent months, even as the pandemic has continued. The Murphy administration upgraded its own revenue projections for the current fiscal year in late February, adding more than $3 billion to the bottom line.
Much more than Murphy administration forecast
The new estimates for the current fiscal year from the OLS add to Murphy’s updated projections another $428.3 million in revenue. That pushes the 2021 fiscal year-end total to $44.6 billion, counting the borrowed money, according to the OLS estimates obtained by NJ Spotlight News.
The OLS is also forecasting additional revenue will be collected during the 2022 fiscal year — nearly $125 million more than what the administration projected, pushing that year’s revenue total to $40.98 billion.
Read the full report here.