Legislation Would Promote Increased Transparency, Collaboration in Fiscal Planning
Legislation Assemblymen Gary Schaer, Joseph Lagana and Tim Eustace sponsored to update and make more transparent New Jersey’s annual budget process gained Assembly approval on Thursday.
“Year after year, this state’s dismal budgetary planning has driven us to crisis. The people of New Jersey deserve a budget process that is comprehensive in its revenue forecasting and contingency planning,” said Schaer (D-Bergen/Passaic), chair of the Assembly Budget Committee. “By implementing the consensus forecasting process employed by most other states in the country, this legislation will better engage the residents the annual budget most directly affects and reform fiscal planning in New Jersey altogether.”
The bill (A-4326) would make more transparent and publicly available information that the executive and legislative branches consider in enacting the state’s annual appropriations act. The measure would modernize methods for revenue estimating and reporting, executive presentation of budget recommendations, revenue certification and budget contingency planning.
The legislation would establish a three-member advisory board that includes legislative and executive branch representatives to provide revenue forecasting advice for budget purposes. 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 with knowledge of state tax policy and revenue analysis, to be selected by the two aforementioned parties.
The board would adopt its advisory consensus forecasts at a public meeting held on or before January 15 of each fiscal year and readopt or revise the advisory consensus forecast for the current and ensuing fiscal year at a public meeting held on or before May 15 of each fiscal year.
“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 Lagana (D-Bergen/Passaic). “Making New Jersey’s budget process more transparent and more democratic via this bill will help eliminate the potential for the gimmicks and shortfalls that resulted in credit downgrades for our state.”
In addition, the measure would require the governor’s annual budget address to include:
· an explanation of any difference between the governor’s revenue estimates and the board’s consensus estimates for the current and next fiscal year;
· for the next fiscal year, for certain major appropriations programs, a comparison of recommended budget amounts and statutorily required amounts;
· for two subsequent fiscal years, a comparison of all recommended appropriations to appropriations projected to be required on a current services basis budgeting method; and
· revenue estimates that will cover the previous fiscal year, the current fiscal year, the next fiscal year and include projections for two ensuing fiscal years thereafter.
The bill also directs the director of the Division of Budget and Accounting in the Department of the Treasury, in consultation with the legislative budget and finance officer and the Office of Information Technology, to design, develop and maintain a public searchable Internet database with information on appropriations the governor recommends for the current and following fiscal year.
“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 Eustace (D-Bergen/Passaic). “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.”
In addition to fulfilling the constitutional responsibility to certify the revenue available to support annual appropriations, the bill would require the governor to include a contingency plan describing specific actions the governor or legislature will take to address a potential revenue shortfall.
The bill also expands the state’s monthly revenue reporting requirement to include the Property Tax Relief Fund and the Casino Revenue Fund. The bill requires that the monthly reports be transmitted to the Senate president, the Assembly speaker, the chairs of the respective Appropriation and Budget committees, the state treasurer, the state auditor and posted online on the official website of the Division of Budget and Accounting in the Department of the Treasury for the duration of three consecutive fiscal years.
The measure passed 42-31.