No New Taxes in N.J. as Pandemic Forecast Turns ‘Less Bad’
“Even if we continue to face the challenges of the pandemic, we cannot and will not sit still,” the governor said in a statement on Monday. “Now is the time to put a plan into action to trigger the recovery of New Jersey and move our economy forward.”
Apr. 23, 2021, 1:05 p.m. ET
An important pillar of the budget is the proposal to fully fund the state’s state pension obligations for the first time since 1996. If accepted, Ms. Muoio said, the allocation would ultimately lead to cost savings for the state.
The state has not waived the full amount of its pension obligation for 25 years, which resulted in additional debt of $ 4 billion, Ms. Muoio said. Under a legislative brokered contract, Mr. Murphy was on track to fund the state’s portion in full by next year. The spending plan released on Tuesday accelerates this engagement.
Under the plan, the government surplus, which proved to be an important resource during the first wave of the pandemic, would not grow, state officials said, but would stay at around the level seen at the end of 2020.
“I think we all now know what a rainy day looks like,” said Ms. Muoio.
In November, the state borrowed $ 4.29 billion to cover its operating costs, a move the Republicans tried unsuccessfully to block, citing the burden of future generations of taxpayers. The state is not expected to pay interest on these debts during the fiscal year covered by the proposed budget, administration officials said.
James W. Hughes, former dean of the Edward J. Bloustein School of Planning and Public Order at Rutgers University, said the state’s decision to turn to borrowing made sense at the time.
“It’s so overused, but whatever the term – unprecedented, uncharted waters – it really was five or six months ago,” said Hughes.