Legislation Assembly Democrats Gary Schaer, Troy Singleton, Tim Eustace, Nancy Pinkin and Joann Downey sponsored to end state revenue disputes and improve the budget forecasting process recently was advanced by an Assembly panel.
The bill (A-1651) 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. The three-member board would consist of the state treasurer, the chief budget analyst from the Office of Legislative Services and a third public member with knowledge of New Jersey tax policy and revenue analysis, to be jointly selected by the two other members.
“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 successfully employ a consensus forecasting process. Such a process requires the executive and legislative branches to come together to develop fiscal forecasts. Under the state’s current budget process, executive and legislative agencies prepare independent forecasts. The failure to collaborate in preparing the forecasts ultimately results in disputes between the two parties.
The bill also would require the advisory board to hold at least one public hearing during the second quarter of each fiscal year to receive public testimony and invite participants who can provide guidance on the current conditions in, and probable outlook for, the performance of the state’s economy.
“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.”
“The key to creating a quality state budget that outlines the best use of taxpayer dollars is starting with the most accurate picture of what the state’s fiscal needs are,” said Eustace (D-Bergen/Passaic). “For that to happen, the executive branch and the legislative branch must cooperate and act in the best interest of New Jersey’s taxpayers.”
“Most states in the nation employ a consensus budget process, because it eliminates controversy and allows all parties involved to focus their efforts on producing a sound budget,” said Pinkin (D-Middlesex). “New Jersey can improve its budget process significantly by establishing this advisory board.”
“The proposed advisory board would encourage collaboration in formulating the forecasting advice given by budget officials on state revenues,” said Downey (D-Monmouth). “This ultimately will lead to greater fiscal responsibility.”
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 would be required to explain in the annual budget address any differences between the revenue estimates made therein and the board’s advisory consensus forecasts.
The measure was advanced Thursday by the Assembly Budget Committee, of which Schaer is chair.