NJ Government Budget, With Plenty of Gimmicks, One of Nation’s Worst, Report Finds
A new report gives New Jersey some of the worst grades of any state for its budget practices.
The new Volcker Alliance “Truth and Integrity in State Budgeting” analysis reviews the budget practices of all states from 2015 through 2019.
According to Bill Glasgall, senior vice president and director of state and local initiatives at the Volcker Alliance, “New Jersey is not one of the great performers in the areas that we track.”
He said one of those areas is budget maneuvers, or what some refer to as budget gimmicks.
“If you have a lot of them as New Jersey as had historically, it means there’s a scramble every year to put the budget together," he said.
The report, which gives Jersey a grade of D for budget maneuvers, notes from 2015 to 2018, “the state used the sale of assets and up-front revenues on financing transactions to shore up the budget, covered recurring expenditures with debt, deferred expenditures, and shifted revenues from special funds into the general fund to pay for recurring costs."
In 2019 ,New Jersey shifted $82 million from the state’s Clean Energy Fund to cover NJ Transit utility costs that are usually paid from general fund dollars, and another $47.5 million from the energy fund was used for utility costs in state facilities. The state also shifted $179.5 million to the general fund from the New Jersey Turnpike Authority.
He said the report, which does not assign any F grades, gives the Garden State a grade of D- for its handling of legacy costs, which are pension and retiree healthcare costs.
“New Jersey has been challenged for decades for this,” he said.
For budget forecasting the state gets a D.
Glasgall said New Jersey could improve things in this area by creating a three-year consensus budget forecast “where the Legislature and the governor come to an agreement on a revenue number so you’re not arguing about it at the last minute, as happens in this state.”
He said New Jersey should also consider undertaking an examination at the real cost of deferred maintenance.
"We all know that Jersey roads and bridges need a lot of repair," he said.
On the plus side, the analysis gives New Jersey a grade of B for its transparency and a B for its reserve fund policies. He noted that the state's “rainy day fund was a bit of a salvation during the early COVID revenue crunch.”
The Volcker Alliance is a nonprofit, non-partisan organization devoted to effective delivery of government. It was created by the late Paul Volker, a former chairman of the Federal Reserve