New Jersey Governor Chris Christie Tuesday proposed a 4% increase in the coming fiscal year’s budget.
The budget forecasts a 4.9% increase in revenues. By comparison, the budget that Christie proposed last winter for the current fiscal year assumed an 8% revenue growth.
“While we are meeting the needs of our people in this budget, we are doing it by spending less than the state spent in fiscal year 2008,” Christie told New Jersey legislators.
An increase in pension spending to $1.676 billion accounts for 85% of proposed increased spending, Christie said. The payment will be the third yearly payment according to an agreement to address the state’s underfunded pension plans. The agreement among the governor and both parties’ legislators was reached two years ago.
“In the past, too often the deficit was declared closed one year, only to reappear the next when the Band-Aids were peeled off,” Christie said. “No more. The state’s reliance on one-time revenues has been dramatically reduced — they made up 13% of the budget under the budget leaders four years ago. Today, it is only 3% of the budget that I put before you.”
New Jersey plans to sell $350 million in general obligation bonds this spring, said New Jersey Treasury Department spokesman William Quinn.
“In November 2012, voters approved the issuance of $750 million in bonds to provide matching grants to colleges and universities to build, equip, and expand higher education,” the governor’s budget summary states. This spring, New Jersey will sell $100 million of the bonds and the proceeds will be used for the higher education capital projects. The $100 million is part of the anticipated $350 million to be sold.
Christie also announced that New Jersey would be participating in the expansion of Medicaid found in the federal Affordable Care Act. Under the act, the federal government is to pay for 100% of the Medicaid expansion costs for the first three years and then gradually reduce its contribution to 90% in 2020.
“Accepting these federal resources will provide health insurance to tens of thousands of low-income New Jerseyans, help keep our hospitals financially healthy and actually save New Jersey taxpayers money,” Christie said. “In fact, taxpayers will save approximately $227 million in Fiscal Year 2014 alone.”
In other New Jersey financial news, Quinn told The Bond Buyer that the state plans to sell new money Transportation Trust Fund Authority bonds later this year, but is not disclosing how much or when.