The New Jersey Business & Industry Association told the Select Commission on Emergency COVID-19 Borrowing today that New Jersey’s fiscal shortfall does not amount to the need for $4.5 billion in borrowing proposed in the FY2021 State Budget.
NJBIA Vice President of Government Affairs Christopher Emigholz urged the commission in written and oral testimony to limit the borrow to only what is truly necessary, as to not add to the state’s massive indebtedness.
He also advocated for following the New Jersey Supreme Court ruling that allowed for borrowing without voter approval during the coronavirus pandemic but only for the shortfall caused by COVID-19.
NJBIA has opposed the $4.5 billion in borrowing because of:
- the State’s non-partisan Office of Legislative Services projected at least $1.4 billion more in revenues than the Murphy administration;
- the surplus was increased by more than $1 billion from the start of FY2020 during the health and economic crisis, while very conservative revenue estimates were used;
- the significant level of new spending in the FY2021 budget unrelated to the coronavirus crisis.
“The Court said: ‘To avoid borrowing in excess of what the law allows, and to be faithful to the Emergency Exception, the Court requires that the Governor or the Treasurer certify the State’s projected revenue figures and the shortfall resulting from the pandemic before each tranche of borrowing’,” Emigholz said.
“A shortfall has two sides, and increased surplus and spending on local projects unrelated to the crisis should not be used to inflate the spending side of that shortfall. Revenue estimates that historically underperform the OLS projections should not be used to augment the shortfall on the revenue side.”
Emigholz stated the $4.5 billion in borrowing should be reduced if state revenues reflect the more realistic OLS revenue projections; if New Jersey receives any additional federal COVID-19 relief dollars that can be used to balance the state budget; and the structural reforms promoted by Senate President Steve Sweeney are undertaken in FY2021.
To see Emigholz’s full written testimony, click here.