(Trenton NJ) – A bond issue proposed by Gov. Phil Murphy is headed for a vote by the State Assembly next week as lawmakers grapple with the economic effects of the novel
The state is facing a $10 billion budget shortfall over the next two years, according to numbers from State Treasurer Elizabeth Maher Muoio.
The state extended fiscal 2020 from June 30 to Sept. 30 and extended the income tax filing deadline to July 15. April tax collections that rely on income were down significantly in April.
The degree of uncertainty in the state budget is “far above the norm,” said Frank Haines, legislative budget and finance officer to the Assembly Budget Committee.
“The local governments, other public entities, and service providers that are accustomed to a clearer picture of the state budget’s impact on them and the citizens they serve are no doubt unsettled,” Haines told the committee. “After all, we did not extend their fiscal years.”
The discrepancy in revenue estimates was troubling some Republicans who participated in an Assembly budget committee hearing on Thursday.
“The administration was not confident in their revenue estimates,” Assemblyman Hal Wirths, R-Sussex, said. “It seems as though the administration is unprepared and hoping for the best.”
Another concern is the possible overpayment of corporation taxes.
“There is a large chance that heavily indebted corporations will ask for their money back,” Assemblyman Rob Clifton, R-Monmouth, said. “I was told that wasn’t considered in the Treasury Department’s estimates because they didn’t know how much taxes have been overpaid. The administration needs to be more responsible because that could devastate revenue and put us back to square one.”
New Jersey’s 375 school districts were told to expect cuts, as $336 million promised by Murphy in February won’t happen. It’s just one of a long list of possible cuts, the governor said on Friday.
“In the absence of our ability to bond and/or [receive] federal cash assistance, a lot of things we hold dear we will not be able to fund,” Murphy said.
Murphy has repeatedly asked for direct cash assistance in any upcoming federal relief bills, which are still being debated in Congress.
The “New Jersey Covid-19 Emergency Bond Act” will allow the governor to borrow $5 billion from the federal government to meet any budget shortfall. The Assembly will vote on the plan on Thursday, which has also drawn support from the county executive and mayors in Essex County, who sent a letter to the governor on Friday.
The Assembly Budget Committee will discuss the borrowing plan when they meet on Monday.