TRENTON – New Jersey ranks third worst in the nation when it comes to long-term budget planning, according to a new think tank report.
The report released Tuesday by The Center on Budget and Policy Priorities says better budget planning would reduce uncertainty for business and make the state a more attractive destination for employers.
New Jersey should ensure cost estimates are as nonpolitical as possible, utilize tools like rainy day funds, subject tax credits to sunset provisions so that they are regularly assessed, and provide regular status reports that translate actuarial language into plain English, the Washington, D.C.-based center says.
“Sound planning is not a partisan or regional practice,” said report co-author Elizabeth McNichol.
The report arrives with the governor’s budget address for FY 2015 scheduled to be delivered this month, and with Gov. Chris Christie already having raised concerns in his State of the State Address about the difficulty of making the next fiscal year’s scheduled pension payment of $2.4 billion.
“Pensions and benefits are a mess and one of the reasons is there has not been regular comprehensive information provided to the Legislature and the public,” said Gordon MacInnes, president of N.J. Policy Perspective, a liberal non-profit agency.
MacInnes also said that the state cuts it too tight in budgeting; $300 million in surplus in a $32 billion budget is less than 1 percent. “Most households would try to avoid being so close to the margins, but not the state of New Jersey,” he said.
During Gov. Christie’s first term, there were no tax increases.
New Jersey was graded 3.5 on a scale of 10 in the report, which suggested the state could improve by providing a greatly expanded report on oversight of tax expenditures, which quantifies how much revenue is lost to tax credits and exemptions; producing multiyear spending and revenue forecasts; and greater oversight of pension funding.
