In a few weeks, Gov. Mikie Sherrill will put forward her administration’s first state budget, with the latest projections for how much New Jersey government plans to spend and collect from taxes for the next fiscal year.
A newly elected fellow Democrat in the Legislature, though, wants to transform the process with a multiyear analysis used in other states.
“One of the most important things that our state government can do, and any level of government, is to be thinking about the long-term, trying to improve people’s lives now, but also working to make decisions that protect our future generation,” Assemblyman Andrew Macurdy (D-Union), an attorney who took office in January, told NJ Spotlight News. “The state budget is a huge part of that.”
The state’s record $58.8 billion budget for the current fiscal year calls for spending to outpace tax collections by more than $1 billion, with a reserves drawdown to help bridge the structural gap for the current fiscal year, which ends on June 30. Outside experts say they expect the imbalance to worsen, although that’s not immediately clear in official budget documents.
Potential for that sort of stress and uncertainty, though, can be spotted in advance. A 2023 analysis by the Pew Charitable Trusts identified some states’ use of long-term revenue and expenditure forecasting as a best practice.
That approach, which can fend off abrupt service cuts or tax increases, is exactly what Macurdy is pitching. His “Long-Term Budget Outlook Act” — Macurdy’s first bill, and one he intends to propose this month — would require forecasts for three fiscal years beyond each July-to-June cycle.
“Taking a longer-term look at our budget will help us be more effective stewards of taxpayer money, lead to better outcomes and it’s a way that we can protect our future generations,” Macurdy said.
Short $1 billion-plus
In a recent report, the Trenton-based New Jersey Policy Perspective think tank named five contributors to what it called a “budget time bomb.” Among them was the rising cost of Stay NJ, a new property-tax relief benefit for senior homeowners. The program is expected to need more than $1 billion during the fiscal year that begins July 1. While the state in past years prepared for similar taxpayer relief, no money was set aside for Stay NJ.
Macurdy‘s bill would require the state treasurer to submit long-term projections to the governor and Legislature each spring. The analyses would include baseline, optimistic and pessimistic projections for each of the three outlying fiscal years. The treasurer’s office, as it does now, would have the opportunity to update projections.
Typically, the governor proposes spending plans in late February or early March, and the treasurer updates the budget forecast after the April 15 income tax payment deadline.
In recent years, lawmakers have tried, with mixed results, to update Trenton’s budgeting practices.
During the 2024-25 legislative session, a bipartisan measure calling for regular state finance stress tests – another best practice cited by Pew — was approved by the Senate but died in an Assembly committee. Democrats control both houses.
In 2023, then-Gov. Phil Murphy enacted a law requiring a “plain language” summary and analysis of an annual treasury comprehensive financial report.
Drafted by the Office of the State Auditor, the user-friendly version of the financial report highlights the latest developments in revenue collections, budget reserves and long-term liabilities — including bonded debt and public-worker pension obligations that combined total $201 billion.
The plain-language law was hailed by the state’s leading accountants organization and other groups for raising public awareness about state finances.
Macurdy has similar motivations.
“Any successful business would be considering what do things look like two, three years down the line,” he said. “How are my revenues matching up with expenditures, what sort of trajectory are we on?”
