TRENTON – A State Budget Crisis Task Force report issued today recommended that New Jersey – burdened by an “eroding” tax structure that can’t sustain programs – improve long-term planning, increase its “rainy-day” fund, develop a strategy to fund critical infrastructure needs, and control retirement health benefit costs, among other things.
The report, prepared by a task force that examined six states – including New Jersey – also suggested presenting the annual budget in a gross budget format so that federal and dedicated funds are included as part of the annual budget recommendation; this would make the presentation more transparent.
The report said of the so-called rainy-day fund that it was exhausted in the last recession when $734 million was used. Periodic recessions will occur, and the state should be prepared, the report stated.
“In the past the state has overridden requirements to deposit excess revenues into the fund. The state should follow the deposit requirements and make additional deposits into the fund so that it is prepared for the next recession, whenever that may be,” the report said.
In addition, the state has many unmet infrastructure needs. “It will need at least $133 billion for transportation, wastewater treatment, and drinking water over the next ten years,” the report said.
Other recommendations included reviewing state and local tax and spending structures, and funding the pension systems.