How Bad Is NJ’s Financial Situation? [AUDIO]
Early last week, State Treasurer Andrew Sidamon-Eristoff reported a $232 million revenue shortfall and another $121 million shortage was reported later in the week. However, that number has climbed, and Eristoff is expected to report how the Christie Administrations plans to close a $676 million budget gap.
Exactly how bad is New Jersey financial situation?
We should find out today as Sidamon-Eristoff and Dr. David Rosen with the non-partisan research arm of the legislature present their latest projections to the Assembly Budget Committee.
Rosen estimates that collections will be off by $1.3 billion through the end of the next budget year.
Assemblyman Vinnie Prieto chairs the panel. He points out, "We've got less than six weeks before we have to have a balanced budget delivered to the Governor to sign." The constitutional deadline for a signed and balanced budget is midnight June 30.
Governor Chris Christie's $32.1 billion proposed budget for fiscal year 2013 relies on 7.3% revenue growth.
Prieto is concerned about this year's budget and how the shortfall will impact spending for the last two months of the fiscal year.
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He explains, "We really want the Treasurer to come before us and let us know what the plans are….How are we going to handle this $350 million dollar deficit that we know of so far?"
The chairman wants to know what cuts, if any are being planned to keep this year's budget in balance. Prieto says the Treasurer and his team should have no problem providing answers because, "They do their (revenue) projections on a daily if not hourly basis."
Monday, the credit rating agency Moodys put out a less than flattering statement regarding Jersey's fiscal situation.
It read, part, "Without any cuts, deferrals, or one-time revenues, a $230 million decrease in projected reserves would leave the state with a narrow $358 million (1.2% of budgeted revenues) ending balance. This would be lower than in any of the past five years, when the state's balances ranged between $500 million in fiscal 2008 and $870 million in fiscal 2011. The revenue shortfall has reduced liquidity over the past fiscal year, and the state has relied on inter-fund borrowing to support operations, although the amount has remained relatively small. The state maintains approximately $800 million of reserves outside the General Fund that are available for internal borrowing."
"The latest report from Moody's is once again great cause for concern for New Jersey taxpayers, especially considering the agency expects New Jersey's economic and employment growth to lag the rest of the nation through 2014," says Prieto. "The only people benefiting under Gov. Christie's economic policies are the millionaires enjoying their Christie tax cuts. It's certainly not those enduring 9 percent unemployment and a net 20 percent property tax increase under Gov. Christie."
The report did not take into account the $121 million shortfall because those monies are outside the general fund and obligated to spending elsewhere.