Legislation sponsored by Assemblymen Gary Schaer and Troy Singleton to end state revenue disputes and improve the budget forecasting process was advanced by an Assembly panel on Thursday.
The bill (A-3620) would establish a joint legislative and executive branch New Jersey Revenue Advisory Board in order to provide consensus revenue forecasting advice for state budget purposes.
“This process has the virtue of eliminating controversy and allowing the participants to focus more clearly on the underlying budgetary issues each year,” said Schaer (D-Bergen/Passaic). “In addition, the process outlined in this bill will provide greater public input and transparency to the revenue forecast.”
The sponsors noted that more than half of U.S. states (28) successfully employ a “consensus” forecasting process.
“This bill is designed to promote agreed-upon revenue estimates as a starting point for the budget-making policy debates involving the executive and legislative branch,” said Singleton (D-Burlington). “In doing so, hopefully it will encourage collaboration and a more thorough and regular public discussion of state revenue estimates in advance of budget deadlines.”
Under the bill, the New Jersey Revenue Advisory Board would consist of the State Treasurer, ex officio, the Legislative Budget and Finance Officer, ex officio, and a third public member jointly selected by the two state officials. The third public member shall be qualified by education, training or experience related to state tax policy and revenue analysis.
The advisory board would be required to hold at least one public hearing during the second quarter of each state fiscal year to receive public testimony and invite participants who can provide guidance on the current conditions and probable outlook for the performance of the state’s economy, as well as the effect such conditions and performances will have on state revenues.
The board would be required to adopt its advisory consensus forecast at a public meeting held on or before January 15 of each state fiscal year and readopt or revise the advisory consensus forecast at a public meeting held on or before May 15 of each fiscal year.
While the bill does not change the state constitutional responsibility given exclusively to the Governor to certify state revenue available to support annual state appropriations, the Governor will be required to explain in the annual Budget Message any difference in revenue estimates made therein compared to the advisory consensus forecasts of state revenues prepared by the board.
The bill also requires the Governor to provide, along with the certification of revenue, an explanation of any difference in the revenue certification from the latest fiscal year advisory consensus forecast made by the board.
The measure was approved by the Assembly Budget Committee.