The state Assembly approved two bills that supporters said would bring greater transparency to the state budget process by changing the way revenue is estimated and requiring more disclosure about new funding sources.
One bill aims to overhaul the way the state makes its revenue projections and creates additional reporting requirements to track funding sources throughout the year.
Democrats drafted the legislation after revenue projections made by the Christie administration that have fallen short in recent years. Christie had relied his loftier projections to call for an income tax cut. And Christie has cited revenue shortfalls when cutting pension contributions that he had pledged to make.
“This legislation is about making sure our state restores its fiscal standing so that we can attract businesses and put New Jersey residents back to work,” said Assemblyman Tim Eustace, D-Maywood, in a statement. “A better financial status starts with a better budget process and making sure that the public can keep elected officials accountable in that regard is an important means of improvement.”
The measure would create a three-member advisory board – comprised of the state treasurer, legislative budget and finance officer and a public member with knowledge of state tax policy and revenue analysis – to assist with revenue forecasting during the state budget process. New Jersey’s constitution gives the governor the authority to certify revenues for the state budget.
The board would adopt an advisory consensus forecast at a public meeting in the first two week of January each year and would revise its forecast for the current and coming fiscal years at a public meeting held on or before May 15 in anticipation of the next fiscal year, which starts July 1. Several other states use the consensus forecasting process.
“Establishing an advisory board that receives public testimony will help introduce fresh perspectives on the economic conditions in our state as we work to develop solutions,” said Assemblyman Joseph Lagana, D-Paramus
The bill also calls for the creation of a searchable online database with information on budget appropriation recommendations. And it would require the governor’s annual budget address to include an explanation of differences between the governor’s revenue estimates and the advisory board recommendations; a comparison of recommended budget amounts and statutory requirements for major appropriations programs and longer-term revenue forecasting that would look at the prior fiscal year, current year, proposed budget and two years after that.
The legislation would also require the state’s monthly revenue reports to include information about the Property Tax Relief Fund and Casino Revenue Fund.
Eustace, Lagana, Assemblyman Gary Schaer, D-Passaic and Assembly Speaker Vincent Prieto, D-Secaucus, sponsored the bill, which passed 42-31.
Lawmakers also approved legislation aimed at bringing greater transparency to the state budget process. The first bill, A-3311, would require an analysis of any new revenue sources the governor proposes in the annual budget address that generate at least $1 million. The requirement would also apply to any budget amendments the governor makes.
“Without a clear and concise picture of the governor’s revenue recommendations our ability to work cooperatively to fulfill our shared responsibility to enact a balanced state budget will be impeded,” said Schaer, chairman of the Assembly Budget Committee. “This is all the more important given our current fiscal restraints and our need to prioritize spending.”
Schaer sponsored the bill with Lagana, Assemblyman Troy Singleton, D-Burlington and Assemblyman Jay Webber, R-Morris.
The bill passed 72 to 0.
The two measures do not yet have companion bills in the Senate. They would need to pass both houses before being sent to Governor Christie for final consideration.