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Budgeting

Posted on: March 25, 2020

State Freezes Spending

State Treasurer Muoio issued a new voluntary disclosure statement to bond holders providing detail on the potential impact COVID-19 may have on the State’s finances, including revenue collection and pension fund contributions. The disclosure statement also noted that the Director of the Office of Management and Budget on Friday placed $920,613,854 of appropriation into reserve in order to ensure sufficient cash and budget authority to meet emergency and statutorily required obligations. 

Included among the items was $141,851,261 from Homestead Benefit Program; $4,782,689 from Senior Freeze Program; and $44,738,465 from Municipal Aid Programs.

 We understand that the municipal aid programs is primarily transitional aid for municipalities that operate on a fiscal year calendar. For a full list of FY2020 spending items placed in reserve please see the Treasurer’s notice.

The State Treasurer also noted that the state expects a decline in revenues in Fiscal Year 2020 and Fiscal Year 2021, which include significant reductions in gross income tax revenues, corporate business tax revenues, and sales tax revenue, motor fuels taxes and casino-related taxes. Lottery sales have already started to decline and it is anticipated that trend will continue.

We will continue to keep you posted on the impact COVID-19 will have on the State budget.

Contact: Lori Buckelew, Senior Legislative Analyst, lbuckelew@njlm.org, 609-695-3481 x112.


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