Bill > A4162

Introduced Session

This bill reforms several important phases in the annual State budget process to make more transparent and publicly available information that is considered by the executive and legislative branches in enacting the State annual appropriations act. The bill modernizes statutes that have guided several important aspects of the process since the middle of the previous century. These include annual State revenue estimating and reporting, executive presentation of budget recommendations, revenue certification, and budget contingency planning. This bill establishes a joint legislative and executive branch New Jersey Revenue Advisory Board to provide consensus revenue forecasting advice for State budget purposes. More than half the states employ a "consensus forecasting" process. A consensus process has the virtue of eliminating controversy and allows the participants to focus more clearly on the underlying budgetary issues each year. In addition, the process outlined in this bill will provide greater public input and transparency to the revenue forecast. The New Jersey Revenue Advisory Board will consist of the State Treasurer, ex officio, the Legislative Budget and Finance Officer, ex officio, and a third public member jointly selected by the two State officials. The third public member will be qualified by education, training or experience related to State tax policy and revenue analysis. The advisory board will hold at least one public hearing during the second quarter of each State fiscal year to receive public testimony and invite participants who can provide guidance on the current conditions in, and probable outlook for the performance of, the economy of the State, as well as the effect of such conditions and such performance on State revenues. The board will adopt its advisory consensus forecasts at a public meeting held on or before January 15 of each State fiscal year and readopt or revise the advisory consensus forecast for the current and ensuing fiscal year at a public meeting held on or before May 15 of each fiscal year. The existence of the board will encourage collaboration in formulating the professional forecasting advice given by State budget officials on State revenues. It is intended to promote agreed-upon revenue estimates as a starting point for the budget-making policy debates involving the executive and legislative branches, and encourage a more thorough and regular public discussion of State revenue estimates in advance of State budget deadlines. The bill also requires the Governor's budget message to the Legislature to include an explanation of any difference between the Governor's revenue estimates and the board's consensus estimates for the current and next fiscal year. The budget message will also be required to include for the next fiscal year for certain major appropriations programs a comparison of recommended budget amounts and statutorily required amounts. Also to be included for two subsequent fiscal years is a comparison of all recommended appropriations to appropriations projected to be required on a current services basis budgeting method. Also, the revenue estimates in the budget message will cover the previous fiscal year, the current fiscal year, the next fiscal year, and include projections for two ensuing fiscal years thereafter. The bill also establishes in statute the responsibilities of the Legislative Budget and Finance Officer in the Office of Legislative Services and the State Treasurer to assist the Legislature's budget and appropriations committees during their budget and revenue hearings. After the May public meeting of the Revenue Advisory Board the State Treasurer is required to appear before the committees to report on any revisions to revenue estimates for the current and ensuing year compared to the estimates in the budget message. The State Treasurer must also report any changes in appropriations recommended for the current and next ensuing fiscal year compared to the recommendations in the budget message. The bill also directs the Director of the Division of Budget and Accounting in the Department of the Treasury, in consultation with the Legislative Budget and Finance Officer and the Office of Information Technology, to design, develop, and maintain a single, public searchable Internet database, that contains and displays information on the amounts of all appropriations recommended by the Governor for the current and next ensuing fiscal year, that will allow users to customize and display recommended spending for budget program classifications that often appear at different locations within the Governor's budget message. The bill also formalizes in statute certain responsibilities of both branches in revenue certifications. While the bill does not change the State constitutional responsibility given exclusively to the Governor to certify State revenue available to support annual State appropriations, the Legislature must follow the custom of listing anticipated revenues in the preamble of the annual budget bill which will be considered the Legislature's recommendations of revenue to support annual appropriations. The Governor shall not certify the total amount of revenue on hand and anticipated to balance the budget before the passage of an annual appropriations bill by the Legislature. An outgoing Governor, within a 30-day period before the last day of that Governor's tenure, will be required to recertify State revenue for the current fiscal year and provide to the Legislature a contingency plan recommending specific action to be undertaken by the next Governor or the Legislature to address a potential revenue shortfall for the fiscal year if the recertification so indicates. The bill also improves the disclosure required for monthly and annual reporting of State revenue collections. The bill brings the State funds and revenues monthly reporting requirements statute up to date. This reporting requirement, added to the responsibilities of the Director of the Division of Budget and Accounting in 1944, was last amended in 1977. The provisions of this bill will enhance the current practice of monthly reporting to include the condition and income of all major State funds, including prompt disclosure of the State's accrued revenues as compared with anticipated revenues, itemized by revenue source for major taxes. Detailed monthly reporting will include collections of such accrued revenue by separate components of each such major tax, including but not limited to withholding and estimated payments by taxpayers of gross income tax, by collection methods such as by regular periodic taxpayer returns and through taxpayer compliance programs and other special efforts, and tax refund payments made and refund applications pending. The bill requires the monthly report to be completed and published no later than the 10th working day following the end of each month, instead of at the end of the following month. Annual revenue reporting will also include a statement of miscellaneous revenues itemized by department, major sources of budgeted federal aid itemized by department, itemized information on income to the General State Fund and other budgeted State revenues from major dedicated and trust funds, and sales and use tax collections by industry sector codes. The bill also expands the reporting requirement to include the Property Tax Relief Fund and the Casino Revenue Fund. The bill requires that the monthly reports be transmitted to the President of the Senate, the Speaker of the General Assembly, the chairs of the respective appropriation and budget committees, the State Treasurer, the State Auditor and posted online on the official website of the Division of Budget and Accounting in the Department of the Treasury for the duration of three consecutive fiscal years.

AI Summary

Committee Categories

Roy Freiman (D)*,  Nancy Pinkin (D)*, 

Introduced, Referred to Assembly Budget Committee (on 06/11/2018)