The Trentonian (Trenton, NJ)

Booming tax collection­s leave NJ $10.1B surplus


TRENTON >> New Jersey will carry a $10.1 billion surplus — about 25% of the total budget — into the new fiscal year that starts July 1, a stark turnaround from last year when Democratic Gov. Phil Murphy sought to borrow almost $10 billion because of a revenue downturn.

State Treasurer Elizabeth Muoio delivered the news to the Democrat-led state Senate Budget Committee in writing on Thursday, just a day after sending it to their Assembly counterpar­ts.

The $10.1 billion figure is nearly $4 billion higher than the Murphy administra­tion had forecast earlier this year.

“Thanks to a remarkable two-month revenue collection surge — an April and May ‘surprise’ like no other — state tax collection­s in Fiscal Year 2021 (FY21) are hitting historic highs,” Muoio told lawmakers.

The surge in revenue comes just as lawmakers and Murphy face a June 30 deadline to enact a balanced budget. The extra cash confronts lawmakers and the governor with a tantalizin­g question in an election year: how do you spend the money?

The answer, though, isn’t clear yet. Lawmakers and the governor have to negotiate those details.

The governor will “invest in our public education system, reduce the burden of health care costs, and provide additional tax cuts to New Jersey’s growing middle class,” Murphy’s spokespers­on Alyana Alfaro Post said in an email.

Senate Budget Committee Chairman Paul Sarlo said in a phone interview that he wants to use the funds to pay down state debt, increase the state’s payment for the public pension and make longer-term investment­s.

“The last thing we want to do is create a bunch of new programs,” he said.

The revenue updates are typically delivered in person, and lawmakers have a chance to ask questions of Treasury officials, but the Assembly and Senate hearings were both canceled. No reason was given.

Republican lawmakers on Thursday fumed about the cancellati­ons, saying they showed a lack of transparen­cy. As to how to spend the money, Republican state senators in a remote news conference suggested they could get behind several proposals, including increasing the public pension payment and replenishi­ng the hard-hit unemployme­nt insurance trust fund.

They also suggested considerin­g some kind of giveback to taxpayers, though exactly what that would look like isn’t clear.

“We need to have the conversati­on about how to return the money to the taxpayers,” Republican state Sen. Steve Oroho said.

The cause for the higherthan-expected revenues stems from federal stimulus checks in December and March, quick vaccine developmen­t and rollout and a soaring stock market, according to Muoio.

It’s election year in New Jersey, with Murphy seeking a second term. This week, GOP voters picked Jack Ciattarell­i, a former Assembly member and the founder of a medical publishing company, to be their nominee.

All 120 seats in the Legislatur­e are also on the ballot.

The current fiscal year’s budget got a $4 billion infusion from bonds that Murphy and lawmakers passed legislatio­n to take on. The governor had originally sought nearly $10 billion in borrowing authority, but eventually took out just over $4 billion because of fallen revenues stemming from COVID-19’s effect on the economy.

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