State lawmakers are officially giving Gov. Mikie Sherrill an extra two weeks to prepare and put forward her administration’s first state budget proposal.
Legislation allowing Sherrill to deliver the annual gubernatorial budget message after a late-February statutory deadline won the approval of a key state Assembly committee on Thursday.
Sherrill, a Democrat, is a newcomer to state government who took office last month. According to the legislation, which carries on a longstanding tradition of offering first-year governors extensions, this year’s deadline for delivery of the annual budget message will be March 10.
The annual budget message will be closely watched this year because it comes at a time of potential financial difficulty for a state government that has been spending beyond its means in recent years. Sherrill, a Democrat, has already signaled spending cuts may be in the offing.
The ushering of her first state budget through the Legislature this year is also likely to set a tone for how Sherrill, a former congresswoman, plans to govern alongside fellow Democrats who hold clear majorities in both houses.
By law, the governor’s annual budget message must be delivered to the Legislature on or before the fourth Tuesday in February.
But first-year governors like Sherrill have customarily been granted an extension by lawmakers under a bipartisan tradition that goes back decades.
To officially provide the extra time, lawmakers have to introduce legislation and move it through both houses. From there, the governor has to sign an extension bill into law.
Members of the Assembly State and Local Government Committee took the first step by voting unanimously Thursday in favor of setting the March 10 deadline for this year’s budget message. The legislation is expected to pass both full houses on Monday.
In the Senate, Budget and Appropriations Committee Chair Paul Sarlo (D-Bergen) is cosponsoring the extension bill.
“This will give the new governor more time to develop a state budget and present it to the Legislature, which has been done in the past for every new administration,” Sarlo said.
“We are prepared to work with Gov. Sherrill, who will bring a fresh set of eyes to the budget process, to enact a state budget that meets the challenges ahead and best serves the needs of the people of New Jersey,” he said.
While staff in the Department of the Treasury work virtually year-round on state budget issues, the delivery of the governor’s annual budget message officially kicks off the start of the budget season in Trenton.
After the annual budget message is delivered, a series of public hearings are convened by the respective budget committees in the Assembly and Senate to dig deeper into the executive branch’s spending proposals.
The budget season culminates each year in late June. The New Jersey Constitution requires that a new — and balanced — spending plan be in place when each state fiscal year begins on July 1.
If lawmakers and the governor cannot reach agreement on a new annual spending plan before July 1, state government is shut down. That last occurred in New Jersey nearly a decade ago during former Gov. Chris Christie’s tenure.
During his tenure, former Gov. Phil Murphy worked with lawmakers to hike taxes and overall spending as state government increased allocations for direct property tax relief and resumed full annual funding of the state’s public-worker pension obligations.
Murphy also championed increasing state aid for public schools, reducing New Jersey’s bonded debt and bolstering budget reserves relative to historical levels.
However, Sherrill has inherited a roughly $1 billion gap between projected spending and revenues that Murphy and lawmakers built into the spending plan for the current fiscal year, which ends June 30.
To bridge that structural imbalance, the current fiscal-year spending plan taps budget reserves and relies on other one-time revenue sources, according to public records.
Acting state treasurer Aaron Binder told NJ Spotlight News during an interview earlier this month that addressing the structural budget gap is a top priority for Sherrill.
“If you don’t address that early, the problem just compounds, and you’re stuck with really, really hard decisions later on,” Binder said.
During a Senate confirmation earlier this month, Binder also said Sherrill is seriously considering spending cuts as she crafts her first budget.
“The goal is to look at this entire budget, in totality, and find spending cuts in this budget,” Binder told lawmakers during the hearing.
