FISCAL YEAR 2021-2022
ANALYSIS OF THE NEW JERSEY BUDGET DEPARTMENT OF THE TREASURY
Prepared by the NNewew JerseyJersey LLegislatureegislature OOfficeffice ofof LLEGISLATIVEEGISLATIVE SERVICESSERVICES May 2021 NNEWEW JJERSEYERSEY SSTATETATE LLEGISLATUREEGISLATURE
SENATE BUDGET AND APPROPRIATIONS COMMITTEE
Paul A. Sarlo (D), 36th District (Parts of Bergen and Passaic), Chair Sandra B. Cunningham (D), 31st District (Part of Hudson), Vice-Chair Dawn Marie Addiego (D), 8th District (Parts of Atlantic, Burlington and Camden) Nilsa Cruz-Perez (D), 5th District (Parts of Camden and Gloucester) Patrick J. Diegnan, Jr. (D), 18th District (Part of Middlesex) Linda R. Greenstein (D), 14th District (Parts of Mercer and Middlesex) Declan J. O’Scanlon, Jr. (R), 13th District (Part of Monmouth) Steven V. Oroho (R), 24th District (All of Sussex, and parts of Morris and Warren) M. Teresa Ruiz (D), 29th District (Part of Essex) Troy Singleton (D), 7th District (Part of Burlington) Michael L. Testa, Jr. (R), 1st District (All of Cape May, parts of Atlantic and Cumberland) Samuel D. Thompson (R), 12th District (Parts of Burlington, Middlesex, Monmouth and Ocean)
GENERAL ASSEMBLY BUDGET COMMITTEE
Eliana Pintor Marin (D), 29th District (Part of Essex), Chair John J. Burzichelli (D), 3rd District (All of Salem, parts of Cumberland and Gloucester), Vice-Chair Daniel R. Benson (D), 14th District (Parts of Mercer and Middlesex) Robert D. Clifton (R), 12th District (Parts of Burlington, Middlesex, Monmouth and Ocean) Serena DiMaso (R), 13th District (Part of Monmouth) Gordon M. Johnson (D), 37th District (Part of Bergen) John F. McKeon (D), 27th District (Parts of Essex and Morris) Nancy F. Muñoz (R), 21st District (Parts of Morris, Somerset and Union) Carol A. Murphy (D), 7th District (Part of Burlington) Verlina Reynolds-Jackson (D), 15th District (Parts of Hunterdon and Mercer) William W. Spearman (D), 5th District (Parts of Camden and Gloucester) Benjie E. Wimberly (D), 35th District (Parts of Bergen and Passaic) Harold J. “Hal” Wirths (R), 24th District (All of Sussex, and parts of Morris and Warren)
OFFICE OF LEGISLATIVE SERVICES
Thomas Koenig, Legislative Budget and Finance Offi cer Vacant, Assistant Legislative Budget and Finance Offi cer
Marvin W. Jiggetts, Director, Central Staff David Drescher, Section Chief, Revenue, Finance and Appropriations Section
This report was prepared by the Revenue, Finance and Appropriations Section of the Offi ce of Legislative Services under the direction of the Legislative Budget and Finance Offi cer. The primary authors were Scott A. Brodsky and Parag Shende with additional contributions from Joseph A. Pezzulo.
Questions or comments may be directed to the OLS Revenue, Finance and Appropriations Section (Tel. 609-847-3835) or the Legislative Budget and Finance Offi ce (Tel. 609-847-3105).
DEPARTMENT OF THE TREASURY
C-6 to C-7; C-14 to C-15; C-23; C-25; Budget Pages...... D-373 to D-422; E-6; G-4 to G-8
The data presented in this Office of Legislative Services Budget Analysis reflect 12-month fiscal years beginning on July 1 and ending on June 30 of the subsequent year.
Fiscal Summary ($000) Adjusted Percentage Expended Appropriation Recommended Change FY 2020 FY 2021 FY 2022 2021-22 State Budgeted $3,016,273 $3,191,588 $3,431,150 7.5%
Federal Funds 62,520 10,083 10,083 0.0%
Other 369,363 503,282 490,600 (2.5%)
Grand Total $3,448,156 $3,704,953 $3,931,833 6.1%
Personnel Summary - Positions By Funding Source Percentage Actual Revised Funded Change FY 2020 FY 2021 FY 2022 2021-22 State 3,619 3,496 3,632 3.9% Federal 47 51 57 11.8%
Other 1,623 1,580 1,794 13.5%
Total Positions 5,289 5,127 5,483 6.9% FY 2020 (as of December) and revised FY 2021 (as of January) personnel data reflect actual payroll counts. FY 2022 data reflect the number of positions funded.
To be consistent with the data display in the Governor’s FY 2022 Budget, the above table includes the funding data in the Department of the Treasury for Higher Educational Services. Other explanatory data for these programs are included in a separate booklet entitled: “Higher Educational Services.”
Link to Website: http://www.njleg.state.nj.us/legislativepub/finance.asp
Department of the Treasury FY 2021-2022
Highlights
The data presented in this Office of Legislative Services Budget Analysis reflect 12-month fiscal years beginning on July 1 and ending on June 30 of the subsequent year.
PROPERTY TAX RELIEF: GRANTS-IN-AID AND STATE AID
• The Governor’s FY 2022 Budget recommends $2.1 billion1 for Property Tax Relief in the Department of Treasury, which is a $49.8 million, or 2.4 percent, increase from FY 2021. Grants-in-Aid, which finance direct property tax relief to residents, account for $479.7 million of the total ($15 million, or 3 percent, less than FY 2021) and State Aid to local subdivisions of State government accounts for the remaining $1.7 billion ($64.8 million, or 4.1 percent, more than FY 2021). Table 1 on page 5 lists the aggregated components of the recommended State Aid total.
• For FY 2022, the Administration recommends maintaining the FY 2021 parameters of the New Jersey Homestead Property Tax Credit Program, now named the Homestead Benefit Program. The program appropriation is to decline by $15 million based on the Administration’s expectation that the long-term trend of diminishing enrollment will continue. The Governor’s FY 2022 Budget provides $260 million for tax year 2018 homestead credits.
• For FY 2022, the Administration recommends maintaining the FY 2021 funding of $219.7 million for the Senior Freeze program. The program reimburses qualified homeowners for the difference between the amount of property taxes paid on a principal residence in tax year 2020 and the amount paid in the base year.
• The Administration recommends a FY 2022 appropriation of $51.5 million for the Veterans’ Property Tax Deduction, an increase of $11.6 million, or 29.1 percent, over FY 2021. The recommended increase is attributable to the approval by the voters of an amendment to the New Jersey State Constitution, which expands eligibility for the deduction to veterans who did not serve in a time of war and their surviving spouses.
• Municipalities are to receive $1.254 billion in Energy Tax Receipts Property Tax Relief Aid (ETR Aid) in FY 2022, which represents an increase of $12.4 million, or 1.0 percent, over FY 2021. ETR Aid payments to municipalities would be supported by a direct $788.5 million State appropriation and $465.2 million transferred from the Consolidated Municipal Property Tax Relief Aid account in the Department of Community Affairs.
• The Administration intends to pay 100 percent of the actuarially determined State pension contribution to the Police and Firemen’s Retirement System for full-time county and municipal police officers and firefighters. The full contribution represents a one-year acceleration of the payment plan intended to grow in 1/10th increments annually until the achievement of full funding in FY 2023.
1 This amount includes the $465.2 million transfer from Consolidated Municipal Property Tax Relief Aid. 2 Department of the Treasury FY 2021-2022
Highlights (Cont’d)
DIRECT INCOME TAX RELIEF
• The Governor’s FY 2022 Budget includes $319.0 million for the new Middle Class Tax Rebate Program pursuant to P.L.2020, c.94. The law provides up to a $500 rebate to taxpayers with incomes not exceeding $150,000 (married filing jointly) or $75,000 (single, head of household, or married filing separately) with qualifying children. The Administration estimates 764,761 taxpayers will receive this rebate for average rebate amounts of $425 for joint filers and $297 for single filers.
TREASURY OPERATIONS
• The Governor recommends $19.5 million as a first installment to the Division of Taxation for the tax system modernization project in FY 2022. This initiative will entail the installation of an integrated tax system to replace outdated technology and infrastructure.
• The Administration recommends an additional $250,000 to support the Secure Choice Savings Program. The law requires employers with 25 or more employees to participate in a retirement savings program administered through automatic payroll deductions.
• The Governor’s FY 2022 Budget includes an additional $3.4 million to hire staff for the Division of Pensions and Benefits call center. The division’s operations are charged to the State’s pension and health benefits funds through an off-budget account.
OFFICE OF INFORMATION TECHNOLOGY
• The Executive recommends an additional $13.0 million for the Statewide 9-1-1 Emergency Telecommunication System. This additional funding would be used to transition the State’s existing 9-1-1 network, which delivers call routing and location services to local Public Safety Answering Points, to a network that maintains existing services and implements certain Next Generation 9-1-1 features not supported by the current network.
• The Governor’s FY 2022 Budget recommends $2.2 million as a first installment to modernize the New Jersey Comprehensive Financial System and $1.0 million for Office of Management and Budget Technology updates.
• The Administration recommends the continuation of budget language requiring the Office of Information Technology to approve all Executive Branch purchase requests for information technology and telecommunications equipment, maintenance, and consultant services. The budget language requires the office to determine if purchase requests comply with Statewide policies and standards and the Information Technology Strategic Plan approved for each department.
LEGAL SERVICES OF NEW JERSEY
• The Administration recommends a FY 2022 appropriation of $35.5 million for Legal Services of New Jersey. This is a $6.0 million increase over FY 2021. 3 Department of the Treasury FY 2021-2022
Highlights (Cont’d)
NATIONAL CENTER FOR CIVIC INNOVATION INC.
• The Administration recommends a FY 2022 appropriation of $5 million, which is a $2.3 million increase over FY 2021. The National Center for Civic Innovation is the fiscal sponsor of the New Jersey State Office of Innovation.
ECONOMIC DEVELOPMENT AUTHORITY
• The Executive recommends $50.3 million to the Main Street Recovery Fund established by the New Jersey Economic Recovery Act of 2020. The Main Street Recovery Fund provides grants, loans, and loan guarantees to eligible microbusinesses.
• The Governor’s FY 2022 Budget includes $41.0 million to support new and existing economic development initiatives as follows: Lending Partnerships ($25.0 million); Black and Latino Seed Fund ($10.0 million); Pay it Forward Fund ($5.0 million); and NJ IGNITE ($1.0 million).
BOARD OF PUBLIC UTILITIES
• The Administration proposes diverting an additional $92.3 million of Clean Energy Fund balances to the General Fund: $82.1 million for New Jersey Transit utility costs; $5.2 million to defray administrative expenses related to State-funded positions at the Board of Public Utilities’ Office of Clean Energy; and $5.0 million for the purchase of biodegradable products at State institutions in accordance with P.L.2020, c.117.
DEBT SERVICE
• The Governor’s FY 2022 Budget recommends a $395.2 million appropriation for general obligation bond debt service payments, of which $363.1 million would be funded in the Department of the Treasury budget and $32.1 million in the Department of Environmental Protection budget. The proposed FY 2022 appropriation for all general obligation bond debt service payments combined reflects a net $246.0 million, or 38.4 percent, decrease below the amount allocated therefor in FY 2021. The net decline has three major components: (1) a $79.9 million increase in debt service payments on the COVID-19 General Obligation Emergency Bonds; (2) a $239.9 million decrease in the recommended appropriation for anticipated, unspecified, future bond sales, net of FY 2021 interest payments on the emergency bonds; and (3) an $80.6 million decrease in debt service payments on existing refunding bonds. The amount of general obligation debt to be issued in FY 2022 is undetermined.
Background Papers:
Homestead Benefit Program ……………………………………………………………....………… Page 37 The Budgetary Impact of the State’s Bonded Indebtedness ……………………………...... … Page 41 4 Department of the Treasury FY 2021-2022
Highlights (Cont’d)
Table 1 Department of Treasury State Aid to Local Government Entities FY 2020-FY 2022
Expended Adj. App. Recom. STATE AID FY 2020 FY 2021 FY 2022 Energy Tax Receipts Property Tax $1,211,014 $1,241,290 $1,253,703 Relief Aid Police and Firemen's Retirement System State Contribution on $154,309 $190,185 $235,030 behalf of municipalities Veterans' Property Tax Deductions $40,706 $39,900 $51,500 Police and Firemen's Retirement $34,391 $41,197 $36,110 System -Post Retirement Medical South Jersey Port Corporation $33,475 $35,724 $35,724 Support Debt Service-Pension Obligation $25,781 $24,719 $26,512 Bonds Senior and Disabled Citizens' $8,643 $7,800 $7,200 Property Tax Deductions Aid to Counties in Lieu of $1,996 $7,886 $7,886 Insurance Premium Tax Payments Highlands Protection Fund Aid $2,881 $4,400 $4,400 Meadowlands Tax Sharing $4,000 $0 $0 Payments Public Library Project Fund $3,725 $3,727 $3,723 County Boards of Taxation $1,802 $2,103 $2,103 State Contribution to Consolidated Police and Firemen's Pension Fund $0 $246 $76 (PTRF) Total $1,522,723 $1,599,177 $1,663,967
5 Department of the Treasury FY 2021-2022
Fiscal and Personnel Summary
AGENCY FUNDING BY SOURCE OF FUNDS ($000)
Adj. Expended Approp. Recom. Percentage Change FY 2020 FY 2021 FY 2022 2020-22 2021-22
General Fund
Direct State Services $471,519 $484,140 $523,430 11.0% 8.1%
Grants-In-Aid 180,249 273,439 648,266 259.7% 137.1%
State Aid 89,492 37,126 37,126 (58.5%) 0.0%
Capital Construction 0 0 0 ------
Debt Service 272,886 606,384 363,138 33.1% (40.1%)
Sub-Total $1,014,146 $1,401,089 $1,571,960 55.0% 12.2%
Property Tax Relief Fund
Direct State Services $0 $0 $0 ------
Grants-In-Aid 351,158 494,700 479,700 36.6% (3.0%)
State Aid 1,616,799 1,288,202 1,372,080 (15.1%) 6.5%
Debt Service 28,871 0 0 (100.0%) ----
Sub-Total $1,996,828 $1,782,902 $1,851,780 ( 7.3%) 3.9%
Casino Revenue Fund $0 $0 $0 ------
Casino Control Fund $5,299 $7,597 $7,410 39.8% (2.5%)
State Total $3,016,273 $3,191,588 $3,431,150 13.8% 7.5%
Federal Funds $62,520 $10,083 $10,083 (83.9%) 0.0%
Other Funds $369,363 $503,282 $490,600 32.8% (2.5%)
Grand Total $3,448,156 $3,704,953 $3,931,833 14.0% 6.1%
PERSONNEL SUMMARY - POSITIONS BY FUNDING SOURCE
Actual Revised Funded Percentage Change FY 2020 FY 2021 FY 2022 2020-22 2021-22
State 3,619 3,496 3,632 0.4% 3.9%
Federal 47 51 57 21.3% 11.8%
All Other 1,623 1,580 1,794 10.5% 13.5%
Total Positions 5,289 5,127 5,483 3.7% 6.9% FY 2020 (as of December) and revised FY 2021 (as of January) personnel data reflect actual payroll counts. FY 2022 data reflect the number of positions funded.
AFFIRMATIVE ACTION DATA
Total Minority Percentage 32.1% 33.1% N/A ------
6 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000)
ECONOMIC PLANNING AND DEVELOPMENT
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
General Fund, Grants-in-Aid Budget Page: D-381 Main Street Recovery Fund, P.L.2020, c.156
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $55,500 (S) $50,250 ($5,250) (9.5%)
The New Jersey Economic Recovery Act of 2020 appropriated $55.5 million to the Economic Development Authority (EDA) to support new programs and initiatives. According to the Executive, the decline in the requested appropriation is attributable to the removal of EDA administrative costs from the FY 2022 budget. The EDA will have access to these funds for the duration of the fiscal year.
The FY 2021 supplemental appropriation was allocated as follows: (1) $50 million to the Main Street Recovery Fund to support the Main Street Recovery Finance Program; (2) $5 million for competitive grants for zoning and economic planning services in government-restricted municipalities or economic redevelopment plans for distressed assets in other municipalities; (3) $250,000 for the implementation of the New Jersey Ignite Act; (see below) and (4) $250,000 for the implementation of the Economic Development Authority Integrity and Protection Act. All funds have been transferred to the EDA to be used for their respective purposes.
The Main Street Recovery Finance Program authorizes the EDA to issue grants, loans, and loan guarantees to eligible small-businesses, micro-businesses, community development financial institutions, and other lenders. To be eligible for financial support through the program, a business must have fewer than ten employees and less than $1 million in annual revenue according to its most recent tax return. The EDA may also consider a business’s benefit to the community in which it is situated and the degree to which a business enhances and promotes job creation and economic development in a community severely impacted by the COVID-19 pandemic. At least 40 percent of available funding ($20 million) is required to be available to eligible microbusinesses certified by the State as a “minority business” or “women’s business.”
The Economic Development Authority Integrity and Protection Act requires the EDA to appoint a Chief Compliance Officer to manage the authority’s Division of Portfolio Management and Compliance and requires the Governor to appoint an Economic Development Inspector General, each with distinct powers and responsibilities related to the oversight and integrity of EDA programs. According to the EDA website, a Chief Compliance Officer has been appointed. As of April 27, 2021, an Economic Development Inspector General has not been appointed.
7 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
General Fund, Grants-in-Aid Budget Page: D-381 New Jersey Commission on Science, Innovation & Technology
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $1,000 $0 $1,000 $3,200 $2,200 220.0%
The rationale for the recommended increase in the appropriation is unsubstantiated, although the Budget in Brief indicates that the funding is part of a new $100 million, multi-departmental Economic Growth Initiative intended to boost economic recovery in communities, provide access to capital for minority-owned businesses, and help government support sustainable economic growth. According to the commission’s 2020 Annual Report, the FY 2019 appropriation of $1 million supported FY 2020 administrative expenses and grant awards to businesses participating in two federal programs: the Small Business Innovation Research Program and the Small Business Technology Transfer Program. The FY 2020 allocation of $1.0 million was de-appropriated as part of general budget reductions.
The New Jersey Commission on Science, Innovation, and Technology encourages the development of scientific and technological programs, stimulates academic-industrial collaboration, and coordinates the activities of technology centers and business facilities. In addition to these responsibilities, the commission is required to appoint an Innovation Council from its membership. The Innovation Council is charged with determining how to stimulate technology transfer between public and private research institutions and industries, including the transfer of information from various federal agencies.
General Fund, Grants-in-Aid Budget Page: D-381 Small Business Bonding Readiness Assistance Fund, EDA
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $250 $0 $250 $500 $250 100.0%
The Executive recommends a 100 percent increase in State support for the Small Business Bonding Readiness Assistance Program. The rationale for the recommended increase in the appropriation is unsubstantiated. P.L.2016, c.84 directs the EDA to provide support services to small businesses and to assist them in securing surety bonding so that they may bid on public works projects or contracts offered by the State or federal government. This program is managed by the EDA in partnership with the African-American Chamber of Commerce of New Jersey, Inc. The training includes workshops and strategic counseling sessions spanning several areas, including bonding and insurance, business development, financial presentation, construction and credit law, construction management, estimating, personal credit, and business credit.
State appropriations of $250,000 each in FY 2018 and FY 2019 were fully expended. In response to a FY 2020 OLS Discussion Point, the EDA noted that 79 small business owners applied to participate in the first round of programming; 32 were approved for participation. The FY 2020
8 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
allocation of $250,000 was de-appropriated as part of general budget reductions. The entire FY 2021 appropriation of $250,000 has been fully expended.
General Fund, Grants-in-Aid Budget Page: D-381 Economic Redevelopment and Growth Grants, EDA
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $3,210 $12,430 $16,737 $18,119 $1,382 8.3%
According to the Executive, the recommended increase in the Economic Redevelopment and Growth (ERG) appropriation is based on projected increases in the number of entities eligible to receive growth grant payments for commercial redevelopment projects. The EDA anticipates that 21 entities will receive grant payments in FY 2021 and 23 entities will receive grant payments in FY 2022. In addition, the Governor proposes the continuation of budget language that allows for supplemental appropriations of unspecified amounts during FY 2022 to meet unanticipated ERG payment obligations without further legislative approval. As of May 11, 2021, FY 2021 expenditures total $15.7 million, leaving the ERG appropriation with an unexpended balance of $1.0 million.
According to February 5, 2021 program activity reports, the EDA has, since program inception, approved $610.1 million in ERG grant awards to 25 commercial projects. The New Jersey Economic Recovery Act of 2020 authorized an additional $220 million in tax credits to be awarded through the ERG program as follows: (1) $150 million for projects which are predominantly commercial and contain 100,000 or more square feet of office and retail space, or industrial space for purchase and lease and may include a parking component; (2) $50 million for residential projects in any New Jersey county; and (3) $20 million for qualified residential projects and mixed use parking projects in select Garden State Growth Zones.
State ERG reimbursements are available for commercial redevelopment projects that are located in certain geographic areas and that meet two financial criteria. First, the financial assistance must close a project financing gap that would prevent a project’s realization. Second, the project must yield financial benefits to the State over a period of up to 20 years that exceed the cost of the incentive. There are no capital investment and job creation thresholds. State ERG awards: (1) equal up to 75 percent of the annual incremental State tax revenue attributable to a project (or up to 85 percent in a Garden State Growth Zone, a designation comprising the cities of Atlantic City, Camden, Passaic, Paterson, and Trenton); (2) cannot exceed 30 percent of the total project cost in conjunction with any municipal ERG award (or 40 percent in a Garden State Growth Zone municipality); and (3) are paid in up to 20 annual installments. Aggregate State reimbursement payments for commercial redevelopment projects are uncapped but the EDA may only consider applications received prior to December 31, 2021. All ERG recipients obtain their reimbursement only after project completion.
9 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
General Fund, Grants-in-Aid Budget Page: D-381 Lending Partnerships
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $0 $25,000 $25,000 --
This new appropriation is to supplement current EDA lending programs through which the authority provides loan financing to businesses, either directly or through qualified community development financial institutions (CDFI), including the Premier Lender Program, Premier CDFI Program, the Loan to Lender Program, and the CDFI Loan Loss Reserve Fund to support collaborations between the non-profit and private sectors that will enhance business recovery and growth.
Budget language proposed by the Governor authorizes the FY 2022 appropriation to be deposited in the EDA’s Economic Recovery Fund. The Economic Recovery Fund was established in 1992 to provide a source of funds for economic development projects, new programs to assist small businesses, and to leverage funds for economic recovery through public-private partnerships, grants, guarantees, and direct loans.
General Fund, Grants-in-Aid Budget Page: D-381 Black and Latino Seed Fund
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $0 $10,000 $10,000 --
The Black and Latino Seed Fund is intended to address the racial wealth gap by providing access to capital for start-up businesses owned by minority entrepreneurs. The Governor’s FY 2022 Budget recommends language that authorizes the FY 2022 appropriation to be deposited in the EDA’s Economic Recovery Fund.
General Fund, Grants-in-Aid Budget Page: D-381 NJ IGNITE
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $0 $1,000 $1,000 --
The rationale for the recommended increase in the appropriation is unsubstantiated. NJ Ignite is a grant program that supports the rent of early-stage companies in targeted industries at participating collaborative workspaces. Initially established by the EDA in 2018, the New Jersey Economic Recovery Act of 2020 codified this program into law and provided a supplemental appropriation of $250,000 for NJ Ignite. According to EDA Key Performance data for 2021, the 10 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
authority set a goal of registering 30 NJ Ignite collaborative workspaces. The Budget in Brief indicates that the funding is part of a new $100 million, multi-departmental Economic Growth Initiative intended to boost economic recovery in communities, provide access to capital for minority-owned businesses, and help government support sustainable economic growth.
Depending on the terms of the grant agreement, the start-up company does not have to pay rent for two, four, or six months. The collaborative workspace provides free rent for one-third of the grant period and the EDA pays rent on behalf of the start-up company to the collaborative workspace for the remaining two-thirds of the grant period. In addition, one bonus month of rent support is provided by the EDA for each of the following conditions that a collaborative workspace meets: (1) location in an Opportunity Zone; (2) affiliation with a New Jersey university or healthcare facility; (3) recent establishment; (4) certification as a “minority business” or “women’s business”; or (5) first presence of a foreign company entering into the United States. A start-up’s maximum grant amount, including any bonus rent payment, is $25,000, and there is no limit on the amount that may be awarded to a single facility for rent support grants.
General Fund, Grants-in-Aid Budget Page: D-381 Pay It Forward Fund
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $0 $5,000 $5,000 --
According to the FY 2022 Budget in Brief, the Pay It Forward Fund will finance workforce training and wrap-around services for low-income and underserved individuals in exchange for repayment once they secure higher-wage jobs. Once repaid, funds would be used to support future program participants. The Budget in Brief notes that this initiative will be co-financed by the New Jersey CEO Council.
General Fund, Grants-in-Aid Budget Page: D-381 Brownfield Site Reimbursement Fund
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $22,261 $9,185 $0 $5,965 $5,965 --
This account funds payments to developers of brownfield sites under the Brownfields and Contaminated Site Remediation Program. In addition to the recommended $6.0 million program appropriation, the Governor proposes the continuation of budget language authorizing the Office of Management and Budget to appropriate, during the course of the upcoming fiscal year, additional amounts necessary to meet unanticipated program obligations. The supplemental appropriations may be allocated out of the General Fund or from the constitutional dedication of six percent of annual corporation business tax collections for environmental purposes that support the remediation of discharges of hazardous substances.
11 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
In FY 2021 the Brownfield Site Reimbursement Fund was supported by $6.5 million in constitutionally dedicated corporation business tax monies; $4 million was provided through a supplemental appropriation and a transfer of $2.5 million from funds appropriated to the Department of Environmental Protection for hazardous substance discharge remediation loans and grants. As of May 11, 2021, about $600,000 has been expended to support one payment while $5.9 million remains unexpended. The Administration has indicated that 14 grantees will receive payments from the fund in FY 2022.
The Brownfields and Contaminated Site Remediation Program was established by P.L.1997, c.278 as a tax-increment financing instrument to reimburse developers for up to 75 percent of the costs incurred in remediating contaminated commercial and industrial properties that are abandoned or underused. Payments for a project are capped at the amount of incremental State tax revenues the redeveloped project generates. The law created the Brownfield Site Reimbursement Fund as the account in which State tax revenue produced by redeveloped sites is deposited and then disbursed to developers, but in actuality, the account has obtained funding from a variety of sources, including General Fund appropriations and the constitutional dedication of a portion of corporation business tax collections for environmental purposes that support the remediation of the discharge of hazardous substances.
ECONOMIC REGULATION
BOARD OF PUBLIC UTILITIES
All Other Funds Budget Page: D-385 Energy Resource Management
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $2,922 $6,830 $4,138 $5,185 $1,047 25.3%
This budget line represents monies that are transferred from the Clean Energy Fund to the General Fund to support administrative expenses of the Board of Public Utilities’ (BPU) Office of Clean Energy. Supplementary budget information indicates that the recommended increase in the amount charged to the Clean Energy Fund is attributable to an increase in the cost of salaries and wages that is projected to be charged to the Clean Energy Fund.
The BPU Office of Clean Energy administers and promotes energy efficiency programs and the development of clean, renewable sources of energy. Through its programs, the Office of Clean Energy offers education, outreach, and financial incentives to residential, commercial, industrial, and governmental customers.
12 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
FINANCIAL ADMINISTRATION
DIVISION OF TAXATION
General Fund, Direct State Services Budget Page: D-393 Taxation Services and Administration
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $121,286 $110,719 $113,571 $133,071 $19,500 17.2%
The Administration recommends increasing the appropriation for the Division of Taxation to support the tax system modernization project. In January 2020 the division issued a bid solicitation requesting quotes from qualified vendors to install an integrated tax system to replace outdated technology and infrastructure. In testimony before the Assembly Budget Committee on April 7, 2021, the Department of the Treasury indicated that the FY 2022 funding will support the first phase of the project and is anticipated to cost $64 million over five years. The most recent update to the bid solicitation indicates a quote submission deadline of April 6, 2021. The Division of Taxation is responsible for the administration of tax laws and the valuation of real property in New Jersey.
All Other Funds Budget Page: D-394 Taxation Services and Administration
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $115,414 $109,978 $122,470 $125,959 $3,489 2.8%
This budget line aggregates several off-budget funds administered by the Division of Taxation and reflects the funds’ administrative expenses and transfers to other state agencies. In FY 2022, four components account for $126.0 million of the appropriation: (1) $83.3 million in anticipated collections for that part of the cigarette tax whose proceeds are deposited in the Dedicated Cigarette Tax Revenue Fund and pledged for the payment of debt service on the Cigarette Tax Revenue Refunding Bonds, Series 2012; (2) $22.5 million transferred from the New Jersey Domestic Security Account – which contains the first $2 of the $5 per day vehicle rental surcharge – to the departments of Agriculture, Health, and Law and Public Safety for the Agro- Terrorism Program, Medical Emergency Disaster Preparedness for Bioterrorism Program, State Police salaries related to Statewide security services, and counter-terrorism programs operated by the Office of Homeland Security and Preparedness; (3) $16.6 million for the cost of the Division of Taxation compliance and enforcement activities; (4) $3.5 million associated with the Meadowlands Regional Assessment whose proceeds are used for Meadowlands adjustment payments to municipalities in the Meadowlands District that by statutory formula are entitled to receive payments.
The projected increase in this budget line is due, in part, to a reduction in the anticipated amount of revenue needed to pay the Cigarette Tax Revenue Refunding Bonds, Series 2012, debt service 13 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
in FY 2022. For FY 2021, the anticipated debt service payment was $86.0 million. This payment is reduced to $83.3 million in FY 2022, a decrease of $2.7 million. This decrease is offset by an anticipated $5.2 million increase in revenues generated by the domestic security fee and a projected $1 million increase in Meadowlands Regional Assessment revenues.
The Governor recommends the continuation of FY 2021 budget language authorizing the appropriation of additional amounts as are required to pay the debt service on the Cigarette Tax Revenue Refunding Bonds. During the FY 2021 budget process the Administration maintained this language would allow the State to ensure funds would be available to meet its debt service obligations in case of insufficient cigarette tax revenue collections.
DIVISION OF INVESTMENT
General Fund, Direct State Services Budget Page: D-394 Secure Choice Savings Program, (P.L.2019 c.56)
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $250 $500 $250 100.0%
During the FY 2021 budget process, the Administration indicated that the FY 2021 appropriation would support the launch of the Secure Choice Savings Program. According to the State accounting system, no funds have been expended as of May 11, 2021.
P.L.2019, c.56 requires the program to be implemented by March 28, 2021 but also allows the New Jersey Secure Choice Savings Board to extend the implementation and enrollment period by up to 12 months. The board is comprised of seven members: three Executive Branch officials and four public members, but only one public member has been appointed. Pending additional appointments to the board, the department has been working to support and facilitate the smooth implementation of the program as soon as possible after the board’s organization.
Under the law, employers with 25 or more employees are required to participate in a retirement savings program administered through automatic payroll deductions, allowing employees of small businesses to save for retirement. Employees will be automatically enrolled in the program, but will have the opportunity to opt out. Employees of businesses with fewer than 25 employees may also participate in the retirement savings program even though their employers are not required to offer a payroll deduction for that purpose. The program gives workers the option to invest in a State-administered Individual Retirement Account. The law also established the New Jersey Secure Choice Savings Board, in but not of, the Department of the Treasury, to administer the program, including the determination of investment options.
14 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
GENERAL GOVERNMENT SERVICES
DIVISION OF PURCHASE AND PROPERTY
General Fund, Direct State Services Budget Page: D-399 Special Purpose: Disparity Study
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $1,000 $0 ($1,000) (100.0%)
On December 23, 2020, the department announced the selection of Mason Tillman Associates, LTD to research, structure, and conduct a comprehensive and legally defensible disparity study of the State’s contractual awards in construction, goods, and services over a five-year period, to determine the level of use of minority, women, and veteran-owned businesses (MWVOB) as contractors and subcontractors by the State for construction and construction-related services and goods, commodities, and select professional services. The study will recommend race- and gender-neutral programmatic remedies that would be sufficient to address any identified disparity or underutilization of MWVOB firms. The study will also review the effectiveness of the State’s current race- and gender-neutral programmatic remedies and recommend race- and gender- conscious remedies to improve those initiatives. The study will cover the period from July 1, 2015 through June 30, 2020. According to the State accounting system, Mason Tillman Associated, LTD has been paid $965,000 as of May 11, 2021.
PUBLIC BROADCASTING SERVICES
General Fund, Direct State Services Budget Page: D-399 Special Purpose: Support for Public Broadcasting - NJTV
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $0 $1,000 $1,000 --
According to a published new report, this funding will allow NJ PBS (the rebranded name of NJTV) to purchase new equipment and provide additional programming.
Established pursuant to P.L.1968, c.405, the New Jersey Public Broadcasting Authority owned and operated New Jersey Network (NJN) Public Television and Radio, which broadcast New Jersey public affairs and cultural programming. Effective as of July 1, 2011, and in accordance with P.L.2010, c.104, however, the State ceased to operate NJN. It divested NJN’s radio assets and operating licenses for nine radio stations and two non-profit organizations. The divestiture reduced the role of the authority to maintaining, and if necessary operating, the television stations and other broadcast equipment in accordance with Federal Communications Commission licensing standards. To that end, the authority continues to maintain a management and engineering staff. 15 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
DIVISION OF PENSIONS AND BENEFITS
All Other Funds Budget Page: D-399 Pensions and Benefits
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $62,038 $55,164 $76,819 $80,222 $3,403 4.4%
This budget line represents the Division of Pensions and Benefits expenses for administering the various retirement systems and employee benefit programs. According to State workforce data on page H-12 of the FY 2022 Budget, the Department of the Treasury will be hiring additional personnel to support the operation of the division’s call center. Supplementary budget information indicates that the number of full-time equivalent positions in the division will increase by 33, from 299 in FY 2021 to 322 in FY 2022. Budget language appropriates monies from the State’s pension and health benefits funds for the administrative expenses of the division and the Board of Trustees of the Police and Firemen’s Retirement System.
OFFICE OF INFORMATION TECHNOLOGY
General Fund, Direct State Services Budget Page: D-404 Special Purpose: NJCFS Modernization
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $0 $2,200 $2,200 --
The New Jersey Comprehensive Financial System (NJCFS) is the State’s integrated budgeting and accounting system. NJCFS is managed by the Office of Management and Budget and used by staff in Executive Branch departments and agencies to maintain ledgers of financial activities, manage and control expenditures in accordance with available budget authority, record and monitor revenue collections, and ensure that transactions comply with Generally Accepted Accounting Principles. According to the Department of the Treasury, the design and development of a modernized NJCFS is estimated to cost $39 million spread over fiscal years 2022 through 2025 with the first-year appropriation principally intended to support the scoping out of the project and the drawing up of the specifications for the system replacement.
16 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
General Fund, Direct State Services Special Purpose: Office of Management and Budget Technology Budget Page: D-404 Modernization FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $1,500 $1,000 ($500) (33.3%)
A rationale for the decrease in this budget line has not been substantiated.
General Fund, Direct State Services Special Purpose: Statewide 9-1-1 Emergency Telecommunication Budget Page: D-404 System FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $12,047 $13,658 $13,822 $26,822 $13,000 94.1%
The Executive recommends a $13.0 million increase in appropriations for the Next Generation 9-1-1 project to support the development of a new 9-1-1 call delivery network and the transition to a new 9-1-1 provider that replaces the current analog services provides by Verizon Communications, Inc. The current analog 9-1-1 system is becoming obsolete and relies on telecommunications technology that is limited in meeting Next Generation 9-1-1 capabilities. The legacy system’s current functionality will be steadily eroded because it is incompatible with new technology. The State has opened the bidding process for this project and proposals were due May 5, 2021. According to the bid solicitation, the contract for Next Generation 9-1-1 Services will have a seven-year term.
Over the past two decades, there has been a national movement to modernize the existing 9-1- 1 system, The goal of this movement, typically referred to as Next Generation 9-1-1, is to update the 9-1-1 service infrastructure in the United States to improve public emergency communication services by utilizing current and emerging telecommunication technologies. These improvements will permit individuals in need of assistance to communicate back and forth with dispatchers by text, photo, and video, and will allow information to be shared in real-time with first responders.
17 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
STATE SUBSIDIES AND FINANCIAL AID
General Fund, Grants-in-Aid Budget Page: D-407 Middle Class Tax Rebate Program
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $0 $319,000 $319,000 ----
The Governor’s FY 2022 Budget recommends $319 million for the new Middle Class Tax Rebate established by P.L.2020 c.94. According to budget evaluation data, 764,761 taxpayers will receive a Middle Class Tax Rebate in FY 2022. The proposed budget estimates an average rebate of $425 for joint filers and $297 for single filers. The Governor’s FY 2022 Budget also proposes new budget language authorizing supplemental appropriations of unspecified, unlimited funds from the General Fund to be used to fund rebate payments and program administration.
P.L.2020, c.94 created a new tax rebate program. The rebate is available to taxpayers who have a qualifying child pursuant to federal statute and whose incomes do not exceed $150,000 if the taxpayers are married and filing jointly, or whose incomes do not exceed $75,000 for taxpayers who are single, head of household, or married filing separately. Eligible gross income taxpayers may receive equal to their gross income tax liability for a taxable year, up to a maximum of $500. The taxpayers are required to have a tax liability greater than zero. The rebate will be distributed between July 1 and July 31, but if a taxpayer requests an extension for filing a return, the rebate can be distributed between July 1 and December 31.
Property Tax Relief Fund, Grants-in-Aid Budget Page: D-407 Homestead Benefit Program (PTRF)
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $ 293,688 $143,874 $275,000 $260,000 ($15,000) (5.5%)
The proposed budget recommends $260 million for the Homestead Benefit Program to provide tax year 2018 homestead credits. This is a decrease of $15 million, or 5.5 percent, over the prior fiscal year. According to the New Jersey Comprehensive Financial System, the State has spent $255.0 million. The adjusted FY 2021 appropriation includes $1.4 million that is to be placed in reserve in anticipation of a year-end lapse to the Property Tax Relief Fund, leaving $273.6 million in budgeted spending authority. Because actual FY 2021 program expenditures are less than originally projected, the FY 2022 appropriation falls only $13.6 million, or 4.9 percent, below FY 2021 expenditures.
The reduction in the program’s FY 2022 appropriation is ascribable to the Administration’s expectation of the continuing trend of long-term diminishing enrollment in the program. In FY 2021, the Administration projects 372,691 senior, disabled, and blind recipients in the program with an average benefit of $524 and 148,599 non-senior, non-disabled, and non-blind recipients in the program with average benefit of $407. For FY 2022, the Administration projects a decrease 18 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
in participation and projects 364,058 senior, disabled, and blind recipients with an average benefit of $526 and 124,136 non-senior, non-disabled, and non-blind recipients with an average benefit of $412.
The proposed budget keeps the same parameters of the FY 2021 budget, which includes budget language that overrides the statute regarding the Homestead Benefit Program. This includes: a) eliminating benefits for non-senior homeowners with incomes above $75,000 and senior homeowners with incomes above $150,000; b) reducing benefits from 20 percent to 10 percent of property taxes paid up to $10,000 for senior homeowners with incomes not exceeding $100,000 and for non-senior homeowners with incomes not exceeding $50,000; c) reducing benefits from 20 percent to 6.67 percent of property taxes paid up to $10,000 for non-senior homeowners with incomes between $50,000 and $75,000; d) reducing benefits from 15 percent to 5 percent of property taxes paid up to $10,000 for senior homeowners with incomes between $100,000 and $150,000; e) eliminating the alternative benefit computation under which claimants who are disabled, blind or 65 years of age or older receive the higher payment to which they are entitled under the above schedule or an amount equal to the amount by which property taxes paid in a tax year exceed five percent of the claimant’s gross income subject to certain ranges; and f) maintaining 2006 property taxes, as opposed to 2018 property taxes as the basis for calculating homestead benefits. The Governor also proposes continuing the elimination of benefits for tenants.
Property Tax Relief Fund, State Aid Budget Page: D-408 Senior and Disabled Citizens’ Property Tax Deductions (PTRF)
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $8,543 $8,643 $7,800 $7,200 ($600) (7.7%)
The Governor recommends reducing the FY 2022 appropriation for State reimbursements to municipalities for the cost of the senior and disabled citizens’ property tax deductions, as the Treasury anticipates the steady, long-term decline in the number of program participants to continue. In FY 1999, some 121,000 claimants received deductions. In FY 2021, some 30,275 did so, and the department expects the number to decrease further to 27,899 in FY 2022.
Article VIII, Section I, paragraph 4 of the New Jersey Constitution provides a $250 property tax deduction to homeowners who are 65 years of age or older or disabled or both, and whose incomes do not exceed $10,000. The $10,000 income limit does not include Social Security benefits, and the State reimburses municipalities 102 percent of the revenue loss that occurs as a result of this deduction to cover their administrative expenses.
19 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
Property Tax Relief Fund, State Aid Budget Page: D-408 Veterans’ Property Tax Deductions (PTRF)
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $44,198 $40,706 $39,900 $51,500 $11,600 29.1%
The Governor’s FY 2022 Budget recommends an appropriation of $51.5 million for the Veterans’ Property Tax Deduction program. This is an increase of $11.6 million, or 29.1 percent, over the prior fiscal year. The proposed increase is anticipated to support the expansion, approved by the voters at the November 2020 general election, of eligibility for the veterans’ property tax deduction to veterans who did not serve in time of war and their surviving spouses. Prior to approval of this ballot measure, eligibility for the veterans’ property tax deduction was restricted to veterans who were honorably discharged or released under honorable circumstances from active service during a time of war or emergency circumstances, and their surviving spouses. The Administration expects the number claimants to increase by 32 percent, from 152,710 in FY 2021 to 201,846 in FY 2022.
Article VIII, Section I, paragraph 3 of the New Jersey Constitution provides a $250 property tax deduction to veteran homeowners who were honorably discharged or released under honorable circumstances from active service in any branch of the Armed Forces of the United States. The State reimburses municipalities for 102 percent of their resultant revenue loss to cover their administrative expenses.
Property Tax Relief Fund, State Aid Budget Page: D-408 Debt Service on Pension Obligation Bonds (PTRF)
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $24,028 $25,781 $24,719 $26,512 $1,793 7.3%
The recommended increase reflects changing contractual debt service payments for State Pension Funding Bonds in FY 2022. The above budget line captures only that portion of total debt service payments that is allocated to the State as the employer contribution on behalf of local government entities for the Police and Firemen’s Retirement System and the Consolidated Police and Firemen’s Pension Fund.
In 1997, the New Jersey Economic Development Authority issued the $2.8 billion appropriations-backed State Pension Funding Bonds, Series 1997A – 1997C pursuant to P.L.1997, c.114 ($375 million of which was refinanced in 2003 as State Pension Funding Variable Rate Refunding Bonds, Series 2003). Their proceeds were intended to finance $2.8 billion of the State’s $3.2 billion unfunded retirement systems liability in 1997. The State had $1.943 billion in outstanding principal payments at the end of FY 2020 through bonds’ maturity in 2029. In FY 2022, the Governor recommends $507.0 million in total pension bond debt service payments, which is $34.3 million, or 7.3 percent, more than the $472.7 million FY 2021 appropriation. The outlay is allocated as follows: (1) $268.8 million in the Department of 20 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
Education (page D-108), (2) $211.4 million in Interdepartmental Accounts (pages D-438 and D- 439), and (3) $26.8 million in the Department of the Treasury (pages D-379 and D-408).
Property Tax Relief Fund, State Aid Budget Page: D-408 Police and Firemen’s Retirement System-Post Retirement Medical
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $43,117 $34,391 $41,197 $36,110 ($5,087) (12.3%)
The $5.1 million reduction in the FY 2022 appropriation is due to plan design savings initiatives, mainly the new plans for early retirees. On June 26, 2019, the State Health Benefits Plan Design Committee approved Plan Design Committee Resolution 2019-6, which required State Health Benefits Program early retirees to be offered the same plan options as active State employees.
In addition, the State hired a Medicare eligibility vendor to identify and conduct outreach to pre- 65 retirees and spouses who are currently eligible or could become eligible for Medicare, in order to ensure enrollment in Medicare when appropriate. The implementation of this program is estimated to reduce projected Plan Year 2020 and 2021 State early retiree medical claims by 1.2 percent and 1.8 percent, respectively.
This appropriation would cover the State’s obligation to pay the medical and prescription drug claims for Police and Firemen’s Retirement System members who retired on disability or with at least 25 years of creditable service in accordance with N.J.S.A.52:14-17.32i. Fiscal year appropriations blend health benefit plan enrollment and claims projections for parts of two plans, which run on a calendar year basis.
Because the State is self-insured for the provision of health care benefits for its employees and retirees and those of certain local governments, the budgeted appropriations are estimates of the claims costs that the State will incur in a given fiscal year. While the appropriations provide the source of funds to pay for claims costs, the actual expenditures are paid out of the State Health Benefits Fund. Balances carried forward in the State Health Benefits Fund from one-year to the next are not reflected in the FY 2022 Governor’s Budget.
21 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
Property Tax Relief Fund, State Aid Budget Page: D-409 Police and Firemen’s Retirement System (PTRF)
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $78,550 $93,094 $110,547 $135,078 $24,531 22.2% Property Tax Relief Fund, State Aid, Budget Page: D-409 Police and Firemen’s Retirement System (P.L.1979, c.109) $51,652 $61,215 $79,638 $99,952 $20,314 25.5%
TOTAL, Police and Firemen’s Retirement System
$130,202 $154,309 $190,185 $235,030 $44,845 23.6%
The proposed appropriations represent 100 percent of the actuarially determined State pension contribution to the Police and Firemen’s Retirement System (PFRS) for full-time county and municipal police officers and firefighters. The full contribution represents one-year acceleration of the payment plan intended to grow in 1/10th increments annually until the achievement of full funding in FY 2023.
The total proposed FY 2022 State PFRS contribution is $594.3 million allocated as follows: (1) Direct State Services under Interdepartmental Accounts, $329.6 million (page D-437); (2) Grants- in-Aid for State colleges’ and universities’ campus police, also under Interdepartmental Accounts, $16.5 million (page D-439); (3) State Aid on behalf of local government entities in the Department of the Treasury, $235.0 million (pages D-408 and D-409); and (4) State lottery revenues, $13.2 million (according to the Office of Management and Budget).
PFRS provides pension coverage to full-time county, municipal, and State police officers and firefighters (but not New Jersey State Police officers who are covered by the State Police Retirement System). Local employers and the State pay employer contributions. The Police and Firemen’s Retirement System account pays for the State’s basic pension contribution, whereas the Police and Firemen’s Retirement System (P.L.1979, c.109) account covers, at 1.1 percent of covered salary, the State’s liability for enhanced pension benefits consisting of a retirement allowance of 65 percent of final compensation for PFRS members who retire after 25 years of service. The system is projected to have 51,695 pensioners in FY 2022 (page D-436).
22 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
MANAGEMENT AND ADMINISTRATION
General Fund, Direct State Services Budget Page: D-412 Public Bank Implementation Board
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $0 $0 $250 $250 ---
The Administration recommends providing a FY 2022 appropriation of $250,000 for the Public Bank Implementation Board. There has not been funding provided for this program prior to FY 2022. According to a FY 2022 Discussion Point response by the Department of Banking and Insurance, this appropriation is intended to assist the board with procuring a consultant to help the board with its ongoing work. The Public Bank Implementation Board established by Executive Order 91 in November 2020 is an advisory board, tasked with the responsibility for planning the development of a public bank for New Jersey and to prepare and publicly release an implementation plan.
General Fund, Appropriation Grants-In-Aid Budget Page: D-412 National Center for Civic Innovation Inc.
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $0 $2,000 $2,700 $5,000 $2,300 85.2%
The National Center for Civic Innovation is a national non-profit organization that serves as the fiscal sponsor of the New Jersey State Office of Innovation. The Administration recommends a FY 2022 appropriation of $5.0 million for the National Center for Civic Innovation Inc. This is a $2.3 million, or 85.2 percent, increase over the prior fiscal year. The rationale for the recommended increase in the appropriation is unsubstantiated. The entire FY 2021 appropriation has been expended. The center also received $1.1 million from the State’s portion of federal assistance through the Coronavirus Relief Fund.
Established in FY 2020, the New Jersey State Office of Innovation is charged with designing and deploying more efficient government services. In response to a FY 2021 OLS budget question, the department noted that the Office of Innovation has developed and administered several information technology modernization projects related to the State’s response to the COVID-19 pandemic. The office also supports the Future of Work Task Force, open government initiatives, and the modernization of business assistance programs. According to its website, the office has 23 staff members.
The Executive also recommends the reauthorization of a language provision which restricts use of the appropriation for administrative expenses. The language also requires the State Treasurer to enter into an agreement with the National Center for Civic Innovation for the provision of advisory services to State departments regarding modernizing, improving, facilitating, and streamlining government services to individuals and businesses. 23 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
All Other Funds Budget Page: D-413 Administration and Support Services
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $38,483 $43,289 $88,643 $68,022 ($20,621) (23.3%)
In FY 2022, this budget line aggregates four off-budget line-items administered by the Division of Administration: (1) $39.1 million in receipts from assessments on each individual health benefits plan sold through the State-based health insurance exchange (Get Covered New Jersey) and deposited into the Health Insurance Exchange Trust Fund; (2) $7.5 million for the Governor’s Council on Alcoholism and Drug Abuse, which coordinates New Jersey’s alcoholism, drug, and tobacco treatment, prevention, research, evaluation, education, and public awareness efforts with receipts from fines levied on convicted drug users and sellers and deposited into the off- budget Drug Enforcement and Demand Reduction Fund; (3) $1.5 million in receipts from public finance activities; and (4) $425,000 in Drug Abuse Education Fund proceeds from taxpayer donations on gross income tax returns for distribution to non-governmental entities providing Statewide drug abuse education programs.
The anticipated $20.6 million decrease in this budget line is the net effect of two changes. In FY 2021, this budget line included $40.1 million received from the Port Authority of New York and New Jersey pursuant to the regional development agreement dated January 1, 1990 and transferred to the Economic Recovery Fund in the New Jersey Economic Development Authority to make debt service payments on bonds issued pursuant to P.L.1992, c.16. The final payment on debt service obligations backed by Economic Recovery Fund balances was made on March 15, 2021. Accordingly, the State will no longer receive payments from the Port Authority of New York and New Jersey for that purpose. This decline is partially offset by an anticipated $19.5 million increase in health benefits plan assessments sold through the State-based health insurance exchange.
PROTECTION OF CITIZENS’ RIGHTS
General Fund, Direct State Services Budget Page: D-416 Office of the Public Defender
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $128,185 $127,033 $132,251 $135,766 $3,515 2.7%
The proposed FY 2022 appropriation for the Office of the Public Defender reflects a $3.5 million, or 2.7 percent, increase over the amount allocated in FY 2021. The increase has two major components: (1) a $4.3 million increase for a “pool attorney compensation” and a $498,000 decrease due to the elimination of the office’s line of credit. A pool attorney is a private attorney that the Office of the Public Defender contracts with to provide services to clients when staff attorneys cannot provide legal service due to conflict of interest or other reasons. 24 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
An “in but not of” agency of the Department of the Treasury, the Office of the Public Defender primarily furnishes legal counsel to indigent defendants in criminal cases. It also represents children and indigent parents in family court in child abuse and neglect as well as termination of parental rights proceedings.
General Fund, Grants-in-Aid Budget Page: D-417 Civil Legal Services for the Poor
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $20,618 $24,618 $29,518 $35,518 $6,000 20.3% All Other Funds, Budget Page: D-417 Civil Legal Services for the Poor $9,587 $8,357 $10,100 $10,100 $0 0.0%
TOTAL, Civil Legal Services for the Poor :
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $30,205 $32,975 $39,618 $45,618 $6,000 15.1%
The Administration recommends an additional $6.0 million to provide general operating support for Legal Services of New Jersey. The rationale for the recommended increase is unsubstantiated. For FY 2022, State funding for the organization is derived from three sources: (1) a $35.5 million Grants-in-Aid appropriation out of the General Fund; (2) an off-budget appropriation of $8.2 million in the Department of Human Services for the provision of legal assistance to individuals facing detention or deportation based on their immigration status (page D-225); and (3) a $10.1 million disbursement of increased court filing fees deposited into the dedicated, off-budget 21st Century Justice Improvement Fund. When the General Fund and off-budget appropriations are taken together, the Governor’s FY 2022 Budget suggests increasing State support for Legal Services of New Jersey by 17.5 percent, from $45.8 million in FY 2021 to $53.8 million in FY 2022.
Legal Services of New Jersey is an independent non-profit organization that provides free legal assistance in civil matters to low-income residents. The organization also runs the Poverty Research Institute to collect data and other information that assist in the provision of civil legal aid to indigent clients.
25 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
General Fund, Direct State Services Budget Page: D-419 Corrections Ombudsperson
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $740 $764 $1,011 $1,321 $310 30.7%
Supplementary budget information indicates that the additional funding will support three additional staff positions.
The Corrections Ombudsperson is responsible for providing a mechanism for resolving issues, complaints, and problems of inmates sentenced within New Jersey’s correctional system as it relates to living conditions and other matters. The Office of the Corrections Ombudsperson investigates when an inmates receives unsatisfactory results from existing institutional channels and is an advocate for fairness. The Office also is a source of information and referral, and helps with answering questions and resolving questions during critical situations.
General Fund, Direct Support Services Budget Page: D-420 State Long-Term Care Ombudsperson
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $1,733 $1,881 $2,105 $2,630 $525 24.9%
Supplementary budget information indicates that the additional funding will support five additional staff positions.
The Office of the State Long-Term Care Ombudsman receives, investigates, and resolves complaints concerning certain health-care facilities serving the elderly and initiates actions to secure, preserve, and promote the health safety, and welfare, and the civil and human rights of the elderly patients, residents, and clients of such facilities. The office represents the interests of State administrative proceedings and engages in negotiation, mediation, and alternative dispute resolution in order to meet the best interests of the elderly. The office also partners with the Department of Human Services to market and provide the Money Follows the Person Program, which transitional individuals from nursing homes and developmental centers to home- and community-based services.
26 Department of the Treasury FY 2021-2022
Significant Changes/New Programs ($000) (Cont’d)
DEBT SERVICE
General Fund, Debt Service Budget Page: E-6
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $258,562 $272,886 $606,384 $363,138 ($243,246) (40.1%) Property Tax Relief Fund, Debt Service Budget Page: E-6
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $23,385 $28,871 $0 $0 $0 (0.0%) Total, Debt Service Budget Page: E-6
FY 2019 FY 2020 FY 2021 FY 2022 Change
Expended Expended Adj. Approp. Recomm. FY 2021 – FY 2022 $281,947 $301,757 $606,384 $363,138 ($243,246) (40.1%)
The Governor’s FY 2022 Budget recommends a $395.2 million appropriation for general obligation bond debt service payments, of which $363.1 million would be funded in the Department of the Treasury Budget and $32.1 million in the Department of Environmental Protection budget. The proposed FY 2022 appropriation for all general obligation bond debt service payments combined reflects a net $243.2 million, or 40.1 percent, decrease below the amount allocated therefor in the amount allocated therefor in FY 2021.
The adjusted FY 2021 appropriation includes $108.7 million appropriated for payments on anticipated, unspecified future bond sales that has been transferred as follows: (1) $100.0 million to the New Jersey State Police for COVID-19 pandemic-related expenses; (2) $8.4 million to the Department of Labor and Workforce Development for vocational rehabilitation services programs; and (3) $276,000 to the Energy Savings Improvement Program line of credit account, leaving $251.2 million in budgeted spending authority. Because actual FY 2021 debt service expenditures are less than originally projected, the recommended appropriation falls only $137.2 million, or 25.8 percent, below FY 2021 expenditures.
The net decrease has three major components: (1) a $79.9 million increase in debt service payments on the COVID-19 General Obligation Emergency Bonds; (2) a $239.9 million decrease in the recommended appropriation for anticipated, unspecified, future bond sales, net of FY 2021 interest payments on the emergency bonds; and (3) an $80.6 million decrease in debt service payments on existing refunding bonds. According to the State of New Jersey Debt Report, FY 2020, the State will make the final payment on the $523.3 million General Obligation Refunding Bonds, Series Q, issued October 13, 2010, in August 2021. The amount of general obligation debt to be issued in FY 2022 is undetermined.
As of June 30, 2020, some $1.599 billion in principal payments on general obligations remained outstanding, while $768.2 million of authorized general obligation borrowing authority had not yet been issued. 27 Department of the Treasury FY 2021-2022
Significant Language Changes
Black and Latino Seed Fund
2021 Handbook: p. -- Addition 2022 Budget: p. D-381 Notwithstanding the provisions of any law or regulation to the contrary, the amount hereinabove appropriated for the Black and Latino Seed Fund shall be deposited in the Economic Recovery Fund established pursuant to section 3 of P.L.1992, c.16 (C.34:1B-7.12) for use by the Economic Development Authority to increase access to capital for underrepresented ethnic and minority groups, subject to the approval of the Director of the Division of Budget and Accounting.
Explanation
This proposed language provision permits funds appropriated for the new Black and Latino Seed Fund initiative to be deposited into the Economic Recovery Fund held by the EDA. The Governor recommends a General Fund appropriation of $10 million to the Black and Latino Seed Fund to increase access to capital for underrepresented ethnic and minority groups.
Lending Partnerships
2021 Handbook: p. -- Addition 2022 Budget: p. D-381 Notwithstanding the provisions of any law or regulation to the contrary, the amount hereinabove appropriated for Lending Partnerships shall be deposited in the Economic Recovery Fund established pursuant to section 3 of P.L.1992, c.16 (C.34:1B-7.12) for uses by the Economic Development Authority to funding lending programs including but not limited to Premier Lender, Premier CDFI, CDFI Loan to Lender, and CDFI Loan Loss Reserve Fund in support of collaborations between the public, non-profit, and private sector for business recovery and growth, subject to the approval of the Director of the Division of Budget and Accounting.
Explanation
This proposed language provision permits funds appropriated for the new Lending Partnerships initiative to be deposited into the Economic Recovery Fund held by the EDA. The Governor recommends a General Fund appropriation of $25 million for Lending Partnerships. This funding would support four programs through which the authority provides loan financing to businesses, either directly or through qualified community development financial institutions (CDFI): the Premier Lender Program, the Premier Lender CDFI Program, the CDFI Loan to Lender Program, and the CDFI Loan Loss Reserve Fund.
EXPLANATION: FY 2021 language not recommended for FY 2022 denoted by strikethrough. Recommended FY 2022 language that did not appear in FY 2021 denoted by underlining.
28 Department of the Treasury FY 2021-2022
Significant Language Changes (Cont’d)
Purchase of Unused Tax Credits
2021 Handbook: p. -- Addition 2022 Budget: p. D-396 In addition to the amounts hereinabove appropriated for Taxation Services and Administration, there are appropriated such additional amounts as may be required, as determined by the Director of the Division of Taxation and subject to the approval of the Director of the Division of Budget and Accounting, for the cost of purchasing unused tax credits pursuant to paragraph (4) of subsection d. of section 77 and section 89 of P.L.2020, c.156, and for the administrative costs of purchasing such unused tax credits.
Explanation
This language provision authorizes supplemental appropriations of unspecified, unlimited amounts, to support the purchase of unused tax credits awarded to taxpayers through several of the State’s economic development incentive programs. The New Jersey Economic Recovery Act of 2020 allows taxpayers to surrender a tax credit certificate or a tax credit transfer certificate to the Division of Taxation in exchange for a cash payment, equal to a portion of the tax credit, instead of applying the credit against their tax liability for a particular tax year or privilege period.
The New Jersey Economy Recovery Act of 2020 permits the exchange of unused tax credits awarded pursuant to the Emerge Program Act, for a cash payment equal to 90 percent of their value, provided the tax credit certificate or tax credit transfer certificate was issued to the taxpayer at least two years prior to the date of surrender. The act also permits the purchase of unused tax credits awarded through other economic development incentive programs in an amount not to exceed 75 percent of the tax credit.
Middle Class Tax Rebate Program
2021 Handbook: p. -- Addition 2022 Budget: p. D-409 In addition to the amount hereinabove appropriated for the Middle Class Tax Rebate Program, there are appropriated from the General Fund such additional amounts as may be required to provide rebates pursuant to P.L.2020, c.94 (C.54A:2-1 et seq.), and there are appropriated such amounts as may be necessary for the administration of the program, subject to the approval of the Director of the Division of Budget and Accounting.
EXPLANATION: FY 2021 language not recommended for FY 2022 denoted by strikethrough. Recommended FY 2022 language that did not appear in FY 2021 denoted by underlining.
29 Department of the Treasury FY 2021-2022
Significant Language Changes (Cont’d)
Explanation
This language change allows additional appropriations from the General Fund, above the $319 million recommended appropriation, to provide the rebates that taxpayers are entitled to pursuant to P.L.2020, c.94, and administrative costs of the program.
Energy Tax Receipts Property Tax Relief Aid
2021 Handbook: p. B-200 Revision 2022 Budget: p. D-410 Notwithstanding the provisions of any law or regulation to the contrary, the amount hereinabove appropriated for Energy Tax Receipts Property Tax Relief Aid and an amount not to exceed $243,737,000 $465,211,000 from Consolidated Municipal Property Tax Relief Aid is appropriated and shall be allocated to municipalities in accordance with the provisions of subsection b. of section 2 of P.L.1997, c.167 (C.52:27D-439), provided further, however, that from the amounts hereinabove appropriated, each municipality shall also receive such additional amounts as provided in the previous fiscal year from the Energy Tax Receipts Property Tax Relief Aid account. Each municipality that receives an allocation from the amount so transferred from the Consolidated Municipal Property Tax Relief Aid program shall have its allocation from the Consolidated Municipal Property Tax Relief Aid program reduced by the same amount.
Explanation
The revised language concerns municipal aid formerly disbursed from the Energy Tax Receipts Property Tax Relief Fund (ETR Fund). The State established the fund in 1997 as an off-budget account through which it distributes receipts from the taxation of certain regulated utilities and telecommunications companies as aid to municipalities (N.J.S.A.52:27D-439), which will instead be disbursed from the Property Tax Relief Fund in FY 2021 and FY 2022. Amendatory language enacted in 1999 instituted a $755 million funding requirement for FY 2002 and mandated that the amount be annual adjusted for inflation thereafter (P.L.1999, c.168).
Since FY 2003, however, energy tax receipts allocated from the ETR fund have been inadequate to cover statutorily required aid payments from the ETR Fund, as the annual excess of energy tax receipts above a set level ($788,492,000 since FY 2006) has been used by the State General Fund. To fulfill the ETR funding requirement, language provisions similar to the above have transferred moneys from the Consolidated Municipal Property Tax Relief Aid program account to the ETR fund. For municipalities, the net effect of these reallocations has been zero, as increases in ETR disbursements have fully corresponded to the decreases in CMPTRA. For FY 2022, the Administration proposes increasing the transfer from CMPTRA to Energy Tax Receipts Property Tax Relief Aid by $221.5 million, from $243.7 million to
EXPLANATION: FY 2021 language not recommended for FY 2022 denoted by strikethrough. Recommended FY 2022 language that did not appear in FY 2021 denoted by underlining.
30 Department of the Treasury FY 2021-2022
Significant Language Changes (Cont’d)
$465.2 million, reflecting the fact that this is a 12-month fiscal year. However, this is also more than the amount that had been transferred from CMPTRA in FY 2020, which was $422.5 million. This is a change of $42.7 million or 10.1 percent. This increase is necessary to meet the ETR funding requirement.
Energy Tax Receipts Property Tax Relief Aid
2021 Handbook: p. B-200 Revision 2022 Budget: p. D-410
Notwithstanding the provisions of paragraph (1) of subsection c. of section 2 of P.L.1997, c.167 (C.52:27D-439) or any other law or regulation to the contrary, the amount hereinabove appropriated for Energy Tax Receipts Property Tax Relief Aid shall be distributed on the following schedule: on or before August 1, 45% of the total amount due; September 1, 30% of the total amount due; October 1, 81.8% 15% of the total amount due; November 1, 9.1% 5% of the total amount due; December 1 for municipalities operating under a calendar fiscal year, 9.1% 5% of the total amount due; and June 1 for municipalities operating under the State fiscal year, 9.1% 5% of the total amount due; provided, however, that notwithstanding the provisions of any law or regulation to the contrary, the Director of Local Government Services, in consultation with the Commissioner of Community Affairs and the State Treasurer, may direct the Director of the Division of Budget and Accounting to provide such payments on an accelerated schedule if necessary to ensure fiscal stability for a municipality.
Explanation
This language change restores the distribution schedule for Energy Tax Receipts Property Tax Relief Aid to what is typical in the language provision for a 12-month fiscal year. The FY 2021 Appropriations Act operated on a nine-month fiscal year, and therefore did not provide a distribution in August or September. This language would distribute benefits on an earlier schedule.
Economic Recovery Fund
2021 Handbook: p. B-202 Deletion 2022 Budget: p. -- An amount equivalent to the amount due to be paid in this fiscal year to the State by the Port Authority of New York and New Jersey pursuant to the regional economic development agreement dated January 1, 1990 among the States of New York and New Jersey and the Port Authority of New York and New Jersey is appropriated to the Economic Recovery Fund established pursuant to section 3 of P.L.1992, c.16 (C.34:1B-7.12) for the purposes of P.L.1992, c.16 (C.34:1B-7.10 et seq.).
EXPLANATION: FY 2021 language not recommended for FY 2022 denoted by strikethrough. Recommended FY 2022 language that did not appear in FY 2021 denoted by underlining.
31 Department of the Treasury FY 2021-2022
Significant Language Changes (Cont’d)
Explanation
This removes the language that required an amount to be appropriated to the Economic Recovery Fund in the amount that the Port Authority of New York and New Jersey had to pay to the State pursuant to an economic development agreement from 1990. The bonds issued per the Economic Recovery Fund Act of 1992 were fully paid off as of March 15, 2021.
Cannabis Regulatory Commission
2021 Handbook: p. -- Addition 2022 Budget: p. D-414 There are appropriated from the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Fund such amounts to fund the Cannabis Regulatory Commission as determined by the Commission for costs required to implement the “New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act,” subject to the approval of the Director of the Division of Budget and Accounting.
Explanation
This language provision allows for the appropriation of funds from the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Fund to be appropriated to the Cannabis Regulatory Commission so that the Commission can enforce the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act. The money that gets deposited into the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Fund includes fees and penalties collected by the Cannabis Regulatory Commission, tax revenues collected from retail sales of cannabis items, tax revenues collected from the “Jake Honig Compassionate Use Medical Cannabis Act”, and any revenues collected from the Social Equity Excise Fee (section 39 of P.L.2021, c.16). The revenues in this Fund are used for a variety of purposes including investments in municipalities deemed to be an “impact zone” pursuant to section 3 of P.L.2021, c.16, overseeing the development, regulation, and enforcement of activities associated with the personal use of cannabis, and training law enforcement officers to detect, identify, and apprehend drug-impaired motor vehicle operators.
EXPLANATION: FY 2021 language not recommended for FY 2022 denoted by strikethrough. Recommended FY 2022 language that did not appear in FY 2021 denoted by underlining.
32 Department of the Treasury FY 2021-2022
Significant Language Changes (Cont’d)
National Center for Civic Innovation Inc.
2021 Handbook: p. B-202 Revision 2022 Budget: p. D-414 Notwithstanding the provisions of any other law or regulation to the contrary, the amount hereinabove appropriated to the National Center for Civic Innovation, Inc. ("NCCI") is subject to the following conditions: the appropriated moneys shall be used by NCCI to pay for administrative expenses, including, but not limited to, staff, office, supplies, travel, consultants and technology, and NCCI, in consultation with the State's Chief Innovation Office, shall provide advisory and implementation services to State departments and agencies in the area of modernizing, improving, facilitating, and streamlining government services to individuals and businesses. The State Treasurer shall enter into an agreement with NCCI to implement this provision.
Explanation
The NCCI is a national non-profit organization that serves as the fiscal sponsor of the New Jersey State Office of Innovation. Established in FY 2020, the New Jersey State Office of Innovation is charged with designing and deploying more efficient government services. This language adds implementation services as a responsibility to the NCCI as it relates to the services that it provides to State departments and agencies in terms of modernizing, improving, facilitating, and streamlining government services to individuals and businesses.
Surplus Revenue Fund Transfers
2021 Handbook: p. E-7 Revision 2022 Budget: p. F-10 79. Notwithstanding the provisions of sections 5 and 6 of P.L.1990, c.44 (C.52:9H-18 and C.52:9H-19) or any other law or regulation to the contrary, there may be transferred from the balance in the Surplus Revenue Fund may be transferred to the General Fund an amount up to the credit made to the Surplus Revenue Fund during the immediately preceding fiscal year, subject to the approval of the Director of the Division of Budget and Accounting.
Explanation
The Administration recommends revising this language provision concerning amounts available for transfer from the Surplus Revenue Fund to the General Fund. Specifically, the language would permit the transfer of the entire FY 2021 Surplus Revenue Fund balance of $1.42 billion to the General Fund in FY 2022. Without the recommended revisions, the amount that may be shifted from the Surplus Revenue Fund to the General Fund would be limited to $6.7 million, which is the amount credited to the Surplus Revenue Fund in FY 2021.
EXPLANATION: FY 2021 language not recommended for FY 2022 denoted by strikethrough. Recommended FY 2022 language that did not appear in FY 2021 denoted by underlining.
33 Department of the Treasury FY 2021-2022
Significant Language Changes (Cont’d)
COVID-19 Pandemic Related Costs
2021 Handbook: p. -- Addition 2022 Budget: p. F-12 99. In addition to the amounts hereinabove appropriated for programs and services to address the COVID-19, there are appropriated to the various departments and agencies, subject to the approval of the Director of the Division of Budget and Accounting, in consultation with the State Treasurer, such amounts as are determined to be necessary to support COVID-19 pandemic related costs that are not eligible for federal reimbursement.
Explanation
As proposed by the Executive, this new language provision allows supplemental appropriations of unspecified, unlimited amounts, without additional legislative approval, for COVID-19 pandemic related costs that are not eligible for federal reimbursement. The language permits the supplemental appropriations to be authorized by the Office of Management and Budget, in consultation with the State Treasurer. The rationale for this recommended language is unsubstantiated.
Transfer of Clean Energy Fund Balances
2021 Handbook: p. E-9 Addition & Deletion 2022 Budget: p. F-12 100. Notwithstanding the provisions of any law or regulation to the contrary, subject to the approval of the Director of the Division of Budget and Accounting, the costs of State department purchases of products in compliance with P.L.2020, c.117, which prohibited certain single-use carryout bags, plastic straws, and polystyrene foam food service products, are appropriated from the Clean Energy Fund.
101. Notwithstanding the provisions of any law or regulation to the contrary, there is appropriated from the Clean Energy Fund $40,000,000 for transfer to the General Fund as State revenue.
Explanation
The new language provision authorizes the supplemental appropriation of unspecified, unlimited amounts from the Clean Energy Fund for State agency costs associated with the implementation of P.L.2020, c.117. The law prohibits the provision or sale of single-use plastic carryout bags, single-use paper carryout bags, and polystyrene foam food service products; and limits the provision of single-use
EXPLANATION: FY 2021 language not recommended for FY 2022 denoted by strikethrough. Recommended FY 2022 language that did not appear in FY 2021 denoted by underlining.
34 Department of the Treasury FY 2021-2022
Significant Language Changes (Cont’d)
plastic straws. The Administration has indicated that at least $5 million will be appropriated to support the purchase of biodegradable materials at State residential facilities, including corrections institutions, developmental centers, psychiatric hospitals, and veterans’ homes.
The FY 2021 Appropriations Act diverted $126.2 million in Clean Energy Fund balances to the General Fund. Of that amount, $40 million was transferred to support general State purposes. The Governor’s FY 2022 Budget does not recommend transferring Clean Energy Fund monies to support general State purposes, therefore, the FY 2021 language provision is discontinued.
Transfer of Funds from the Economic Development Authority
2021 Handbook: p. E-9 Deletion 2022 Budget: p. -- 100. Notwithstanding the provisions of any law or regulation to the contrary, there is appropriated to the General Fund as State revenue $10,000,000 to be paid by the New Jersey Economic Development Authority to the State, which shall be deemed to include the amount required to be paid to the State from the sale of the land for the former Riverfront State Prison as required by subsection b. of section 2 of P.L.2013, c.22.
Explanation
The FY 2021 Appropriations Act anticipated the transfer of $10 million from the EDA to the General Fund as State revenue. During the FY 2021 budget process, the Executive indicated that the $10 million would be comprised of revenues from the sale of the former Riverfront State Prison and funds that support economic development programs, including small business development, economic growth, and innovation initiatives. However, no proposals for the prison were received and a sale never materialized. According to the EDA website, the authority is working with the Department of the Treasury to explore options and next steps.
Cannabis Regulatory Commission
2021 Handbook: p. -- Addition 2022 Budget: p. F-12 101. In addition to the amounts hereinabove appropriated for the Cannabis Regulatory Commission, there are appropriated such additional amounts to pay for costs associated with implementing the “New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act” and the legalization of medical and person use cannabis as determined by the Cannabis Regulatory Commission, subject to the approval of the Director of the Division of Budget and Accounting.
EXPLANATION: FY 2021 language not recommended for FY 2022 denoted by strikethrough. Recommended FY 2022 language that did not appear in FY 2021 denoted by underlining.
35 Department of the Treasury FY 2021-2022
Significant Language Changes (Cont’d)
Explanation
This proposed language provision authorizes the appropriation of unspecified, unlimited amounts to pay for costs associated with the implementation of the New Jersey Cannabis Regulatory Enforcement Assistance, and Marketplace Modernization Act, P.L.2021, c.16, and the legalization of medical and personal use cannabis. The FY 2022 Budget allocates $4.9 million to support the Cannabis Regulatory Commission as follows: by a General Fund appropriation of $857,000 and $4.1 million generated by fees collected pursuant to the New Jersey Compassionate Use Medical Marijuana Act.
P.L.2021, c.16 regulates activities associated with the lawful personal use of products that contain useable cannabis or cannabis resin by persons 21 years of age or older. This would be achieved through the expansion of the scope and duties of the Cannabis Regulatory Commission, which is in, but not of, the Department of the Treasury. The Cannabis Regulatory Commission is responsible for the oversight, administration, and enforcement of the medical and recreational cannabis programs.
EXPLANATION: FY 2021 language not recommended for FY 2022 denoted by strikethrough. Recommended FY 2022 language that did not appear in FY 2021 denoted by underlining.
36 Department of the Treasury FY 2021-2022
Background Paper: Homestead Benefit Program
Budget Pages .... D-406 to D-409
The Governor recommends an appropriation of $260 million in FY 2022 for the Homestead Benefit Program. This program is a modified version of the Homestead Property Tax Credit program, established by P.L.1990, c.61 (C.54:4-8.57 et seq.). Both programs provide credits for eligible homeowners and tenants who are residents of the State to offset property tax bills. The permanent law governing the Homestead Property Tax Credit was amended to take its current form by P.L.2007, c.62. However, that permanent law has been partially overridden by budget language for many years to limit its impact on the State budget. For FY 2022 the Governor recommends continuing substantially the same budget language as FY 2021. The language limits the program by: (1) who is eligible to receive a benefit; (2) the method for calculating the benefit; and (3) the tax year on which benefits are calculated.
Eligibility Restrictions
The statute governing the Homestead Property Tax Credit Program has an income cutoff of $250,000. The proposed FY 2022 budget language continues several stricter eligibility limits that have been in place for many years. It excludes homeowners who are senior, disabled, or blind with incomes above $150,000 from participating in this program (in effect since FY 2009), and excludes non-senior, non-disabled, and non-blind homeowners with incomes above $75,000 (since FY 2010). The language also eliminates tenants from the program, regardless of income (since FY 2011). Chart 1 shows the large declines in participation when tenants were eliminated, and the slower continuing decline of homeowner participants since 2010.2
Chart 1: Participation by Fiscal Year 3000 Non-senior/non-disabled tenant recipients 2500 Senior and disabled tenant 2000 recipients Non-senior/non-disabled 1500 homeowner recipients Senior and disabled 1000 homeowner recipients
500
0 Number of participants(thousands)Numberof
Fiscal Year
2 There was no disbursement of rebates in FY 2013. 37 Department of the Treasury FY 2021-2022
Background Paper: Homestead Benefit Program (Cont’d)
Benefit Calculation
The proposed budget language also limits the amount of benefit each recipient may receive through two mechanisms. It provides that the amount of the rebate that a homeowner can receive cannot exceed the amount received in tax year 2006, and includes language that the Division of Taxation should calculate rebates based on 2006 property tax amounts or as would have been assessed on October 1, 2018. The language also restricts the amount of the rebate so that it cannot exceed the rebate received for property taxes paid in tax year 2006. These provisions have been a part of Appropriations Acts since they were first implemented in the FY 2009 Appropriations Act in response to the 2007-2009 Great Recession. For senior, disabled, and blind recipients, the budget language eliminates the alternative calculation that provides a benefit based on the amount by which property taxes exceed five percent of a taxpayer’s gross income, and subject to certain minimum and maximum amounts. Instead, the Governor proposes language that calculates the benefit based on certain percentages of property taxes paid up to $10,000, with lower percentages than would be used under the permanent law. The specific percentages used in the budget language have been used since the FY 2014 Appropriations Act. The idea of calculating the rebate based on property taxes paid as opposed to gross income has been present in Appropriations Acts since FY 2009. Benefit amounts are displayed in Table 1. The average benefit for each category of recipient has varied little since FY 2012, with the exceptions of years in which benefits were delayed.
Table 1: Statutory and FY 2022 Proposed Homestead Benefit for Homeowners and Tenants
Homeowner Permanent Statute FY 2022 Proposed or Tenant Status Gross Income Benefit Amount Benefit Amount Not Over $70,000 $1,000-$2,000 $0-$1,000 $70,001-$100,000 $600-$2,000 $0-$1,000 $100,001-$125,000 $600-$1,500 $0-$500 Senior or Disabled $125,001-$150,000 $500-$1,500 $0-$500 $150,001-$200,000 $500-$1,000 $0
Homeowner $200,001-$250,000 $0-$1,000 $0 Not Over $50,000 $0-$2,000 $0-$1,000 $50,001-$75,000 $0-$2,000 $0-$667
Under 65 and not Disabled $75,001-$100,000 $0-$2,000 $0 $100,001-$150,000 $0-$1,500 $0 $150,001-$250,000 $0-$1,000 $0 Not Over $70,000 $150-$850 $0 Senior or Disabled, Married $70,001-$100,000 $150 $0 Not Over $35,000 $150-$850 $0 Senior or Disabled, Single Tenant $35,001-$100,000 $150 $0 Not Over $50,000 $150 $0
Under 65 and not Disabled $50,001-$75,000 $150 $0 $75,001-$100,000 $150 $0
38 Department of the Treasury FY 2021-2022
Background Paper: Homestead Benefit Program (Cont’d)
Delay of Benefits
The Governor’s FY 2022 Budget makes a full payment of tax year 2018 benefits; it does not split the disbursement of the rebate into two separate disbursements. In FY 2018, the Appropriations Act included budget language that split the disbursement of the credit into two disbursements, one prior to the end of the fiscal year, and one on or before July 31st. This split the disbursement of the credit across two fiscal years, and so the FY 2018 budget only included appropriations for half of the annual cost. Similar language appeared in the Appropriations Acts of FY 2019 and FY 2020, and appropriations covered the first payment for the current year and the second payment from the prior year. The FY 2020 Appropriations Act included language that would have disbursed the credit in two disbursements for property taxes paid for the second half of 2016, and the first half of 2017. However, due to the budgetary problems caused by the COVID-19 pandemic, there was no disbursement in FY 2020 of the credit for property taxes paid in the first half of tax year 2017. As a result, in FY 2021, there will be one disbursement in May of the credit for property taxes paid in 2017. The Governor’s FY 2022 Budget continues the trend from FY 2021 of one disbursement in May for property taxes paid in tax year 2018. These timing shifts have ensured that the State has not failed to pay a homestead benefit for any tax year, but it now makes those payments following an increasingly long period of time after the payment of property taxes they are intended to offset. Payments in May 2022 are for property taxes paid four years before. A similar timing shift occurred when the program’s FY 2013 appropriation was allowed to lapse, and the FY 2014 appropriation was used to fund the tax year originally meant to be funded in FY 2013. Chart 2 shows the pattern of spending over time.
Chart 2: State Cost by Fiscal Year $2,500 Cost for Tenants
$2,000 Cost for Homeowners (prior tax year) $1,500 Cost for Homeowners (current year) $1,000
$500
$0 Actual or Estimated millions)($Estimated CostsorActual
Fiscal Year
39 Department of the Treasury FY 2021-2022
Background Paper: Homestead Benefit Program (Cont’d)
Program Costs
The cost of the program has continued to decline compared to FY 2008, which was the only time this program was provided close to the appropriation that is required to provide benefits in accordance with P.L.2007, c.62, the program’s enabling legislation. (In that year, the only effect of budget language was to cap benefits for certain tenant beneficiaries.) In FY 2008, the cost of the program was above $2 billion. Since then, the cost of program has decreased as observed in Chart 2 above as budget language restricted eligibility, reduced benefits, and as enrollment in the program declined. The Governor’s FY 2022 Budget does not provide the statutorily necessary funding for the Homestead Benefit Program. The Treasurer stated during a Senate Budget and Appropriations Committee meeting that it would cost an additional $80 million to calculate the rebate based on the most recent year of available property tax data, which is tax year 2017. The Treasurer also estimated that the cost to fully fund the Homestead Benefit Program would be over $2 billion.
40 Department of the Treasury FY 2021-2022
Background Paper: The Budgetary Impact of the State’s Bonded Indebtedness
Budget Pages.... E-2 to E-6, H-7, and H-10
In July 2020, the State enacted the New Jersey COVID-19 Emergency Bond Act. The Emergency Bond Act authorized the issuance of general obligation bonds in an amount not to exceed $9.9 billion to offset revenue shortfalls that were expected to result from the COVID-19 pandemic. After the Supreme Court upheld the constitutionality of the Emergency Bond Act in August 2020, the State issued the COVID-19 General Obligation Emergency Bonds in November 2020, raising $4.30 billion in bond financing, including a par amount of $3.67 billion and an original issue premium of $629.3 million.
The COVID-19 General Obligation Emergency Bonds represent one of the largest bond issuances in the State’s history, which issuance increased the State’s outstanding general obligation bond debt from $1.60 billion to $5.27 billion. In light of this fact, this background paper examines the budgetary impact of the State’s total bonded indebtedness, focusing on how recent bond issuances may affect the State’s outstanding bonded debt and the FY 2022 budget. The paper does not address non-bonded long-term obligations, such as public employee pension and other post-retirement benefits.
Categories of State Bonded Indebtedness
The State is responsible for two categories of bonded debt: (1) general obligation bonds, and (2) appropriations-backed bonds. General obligation bonds represent direct obligations of the State and are backed by the State’s full faith and credit, meaning that the bonds are secured by a direct and irrevocable guarantee of the State’s taxing power as a repayment source. In contrast, appropriations-backed bonds are issued by State agencies, without the backing of the State’s full faith and credit, and are secured by annual appropriations by the State. After an appropriations- backed bond has been authorized, the State Treasurer typically enters into a contract with the issuing agency, which contract promises the annual appropriation of State monies to service the debt.3 Because appropriations-backed bonds are not backed by the State’s full faith and credit, the State is not legally required to appropriate monies to service this category of debt.
The State’s general obligation bonds are rated A3, BBB+, and A- by Moody’s, Standard & Poor’s, and Fitch, respectively. The State’s appropriations-backed debt is rated one or more notches lower by each of the rating agencies, reflecting the risk to bondholders that funds for debt service are subject to appropriation and other risks related to the individual security features of each bond. These bond ratings measure the creditworthiness of the State’s bonds and impact the cost of issuing bonded debt.
In general, the State Constitution requires voter approval before the issuance of general obligation bonds. However, as permitted for the COVID-19 General Obligation Emergency Bonds, the Constitution allows certain general obligation bonds to be issued without voter approval when such moneys are deemed necessary to meet an emergency caused by a disaster or act of God. In contrast, the State was permitted to issue appropriations-backed bonds without voter approval before the adoption of the “Lance Amendment” to the State Constitution in November 2008.
3 Appropriations-backed bonds are a broad category of bonds that are subject to annual appropriation by the State. This category includes installment obligations, revenue bonds, and moral obligation bonds. 41 Department of the Treasury FY 2021-2022
Background Paper: The Budgetary Impact of the State’s Bonded Indebtedness (Cont’d)
Since that time, voter approval is also required for the issuance of appropriations-backed bonds, except in certain cases (e.g. the bonds secured by an independent non-State source of revenue).
The State’s Outstanding Bonded Indebtedness
According to the FY 2020 New Jersey Debt Report, the State’s outstanding bonded indebtedness (i.e. the principal amount of outstanding debt) totaled $33.74 billion as of June 30, 2020. Based on information published by Moody’s Investors Services, the State’s net tax-supported debt represented roughly 5.7 percent of the State’s Gross Domestic Product in 2019, which percentage is the fourth largest of any state in the country.4 As of June 30, 2020, the State also possessed $12.68 billion in legislatively authorized, but unissued, bonding authority, including $768.2 million for general obligation bonds.
As demonstrated in Chart I, appropriations-backed bonds account for the vast majority of the State’s total outstanding bonded indebtedness. In FY 2020, appropriations-backed bonds accounted for $32.14 billion, or 95.3 percent of the State’s outstanding bonded debt. Most outstanding appropriations-backed debt was issued to fund school facilities construction and transportation projects. Between fiscal years 2007 and 2020, the State experienced a notable decrease in general obligation bonds as a percentage of total outstanding bonded debt. While general obligation bonds accounted for 9.5 percent of the State’s outstanding bonded debt in FY 2007, this percentage gradually decreased until FY 2020, when general obligation bonds represented only 4.7 percent of such debt. However, following the issuance of the COVID-19 General Obligation Emergency Bonds, this percentage is expected to significantly increase in FY 2021, during which year 15.5 percent of the State’s total outstanding bonded debt is estimated to be in the form of general obligation bonds.
Chart I: Total Outstanding Bonded Indebtedness $40 $35 $30 Billions $25 $20 $15 $10 $5 $0
General Obligation Bonds Appropriation-Backed Bonds
As shown above, the State’s total outstanding bonded indebtedness remained relatively stable between fiscal years 2009 and 2020. During this twelve-year period, the State’s outstanding bonded debt decreased by 0.4 percent, or $141 million. In FY 2021, the State’s total outstanding
4 2020 State Debt Medians, Moody’s Investors Service, May 12, 2020. Fiscal Year 2020 New Jersey Debt Report, pg. 61. 42 Department of the Treasury FY 2021-2022
Background Paper: The Budgetary Impact of the State’s Bonded Indebtedness (Cont’d) bonded indebtedness is expected to increase by $3.83 billion, or 11.4 percent, from FY 2020, after accounting for the net effect of new bond issuances and anticipated debt service payments.
Fiscal Year 2021 Bond Issuances
As of April 2020, the State has completed four bond issuances in FY 2021 totaling $5.93 billion. These bond issuances include: (1) the COVID-19 General Obligation Emergency Bonds, issued for a par amount of $3.67 billion, and serviced through general revenues; (2) Transportation Program Bonds, which are appropriations-backed bonds issued for a par amount of $1.50 billion and serviced through dedicated revenue (i.e. certain collections from the motor fuels tax, petroleum products gross receipts tax, and sales and use tax); (3) School Facilities Construction Bonds, which are appropriations-backed bonds issued for a par amount of $350 million and serviced through general revenues; and (4) Various Purposes General Obligation Bonds, issued for a par amount of $400 million and serviced through general revenues.
Importantly, the COVID-19 General Obligation Emergency Bonds differ from most bond issuances in that the proceeds were realized as general revenue in order to offset anticipated revenue shortfalls. As such, these bonds have uniquely impacted the State’s budget.
Fiscal Year 2022 Debt Service Payments
Although appropriations-backed bonds account for an overwhelming majority of the State’s debt service payments, these appropriations for FY 2022 are not located in the Debt Service section of the budget; they are instead budgeted across numerous accounts in several departments. Page H-10 of the Governor’s FY 2022 Budget recommends total appropriations of $4.35 billion for on-budget debt service payments for general obligation and appropriations-backed bonds. However, given the scope of this background paper, the OLS disregards some of these entries, which represent non-bonded debt service liabilities. Specifically, this paper excludes $151.4 million of the Governor’s recommended appropriations, including: (1) $89.1 million in non- bonded capital leases; (2) $56.2 million in payments on lines of credit; (3) $6 million in interest payments on short-term borrowing; and (4) $100,000 in interest on short-term borrowings. As a result, on-budget bonded debt service payments would total $4.20 billion in FY 2022, or 9.4 percent of budgeted appropriations.
However, this total does not include debt service payments that are made using dedicated, off- budget revenue sources (e.g. motor vehicle fees or dedicated cigarette taxes) and therefore somewhat understates the State’s total required FY 2022 debt service payment. Although the Governor’s FY 2022 Budget does not aggregate these expenditures, the FY 2020 State of New Jersey Debt Report indicates that the State is expected to make $185.3 million in off-budget debt service payments in FY 2022. If that number is still accurate, total FY 2022 State debt service payments on bonded indebtedness would be $4.39 billion.
As shown below in Chart II, the State’s total bonded debt service payments from on-budget sources steadily increased between fiscal years 2011 and 2021. During this period, total on- budget appropriations for bonded debt payments increased by an annualized rate of 6.4 percent.
43 Department of the Treasury FY 2021-2022
Background Paper: The Budgetary Impact of the State’s Bonded Indebtedness (Cont’d)
Chart II: Total On-Budget Bonded Debt Service $4,500 $4,000 $3,500
Millions $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0
Total on-budget debt service payments on bonded debt remain relatively flat in FY 2022, decreasing by $1.1 million, 0.03 percent, from FY 2021 levels. However, notable changes from FY 2021 include a $132.0 million increase in debt service payments from the School Construction and Renovation Fund and a $246.0 million decrease in general obligation bond debt service.
Specifically, the Governor recommends an FY 2022 appropriation of $395.2 million to support debt service payments toward the State’s general obligation bonds, which total is $246.0 million less than in FY 2021. This difference is primarily attributed to: (1) a $79.9 million increase in debt service payments on the COVID-19 General Obligation Emergency Bonds; (2) a $239.9 million decrease in the recommended appropriation for anticipated, unspecified, future bond sales, net of FY 2021 interest payments on the emergency bonds; and (3) an $80.6 million decrease in debt service payments on existing refunding bonds.
Notably, the Governor’s FY 2022 Budget recommends $166.3 million to support interest payments on the COVID-19 General Obligation Emergency Bonds. This total is $79.9 million more than the interest payments for the bonds in FY 2021 (i.e. $86.4 million). Beginning in FY 2023, the State will be required to make annual principal payments on the bonds as well. Accordingly, in FY 2023, the State will have to appropriate $461.9 million to support principal and interest payments on the emergency bonds, or roughly 11 percent of FY 2022 on-budget debt service payments for all bonded debt. Given the bond’s twelve-year maturity, these annual appropriations will be required through FY 2032.
44 The Offi ce of Legislative Services provides nonpartisan assistance to the State Legislature in the areas of legal, fi scal, research, bill drafting, committee staffi ng and administrative services. It operates under the jurisdiction of the Legislative Services Commission, a bipartisan body consisting of eight members of each House. The Executive Director supervises and directs the Offi ce of Legislative Services.
The Legislative Budget and Finance Offi cer is the chief fi scal offi cer for the Legislature. The Legislative Budget and Finance Offi cer collects and presents fi scal information for the Legislature; serves as Secretary to the Joint Budget Oversight Committee; attends upon the Appropriations Committees during review of the Governor’s Budget recommendations; reports on such matters as the committees or Legislature may direct; administers the fi scal note process and has statutory responsibilities for the review of appropriations transfers and other State fi scal transactions.
The Offi ce of Legislative Services Central Staff provides a variety of legal, fi scal, research and administrative services to individual legislators, legislative offi cers, legislative committees and commissions, and partisan staff . The central staff is organized under the Central Management Unit into ten subject area sections. Each section, under a section chief, includes legal, fi scal, and research staff for the standing reference committees of the Legislature and, upon request, to special commissions created by the Legislature. The central staff assists the Legislative Budget and Finance Offi cer in providing services to the Appropriations Committees during the budget review process.
Individuals wishing information and committee schedules on the FY 2022 budget are encouraged to contact:
Legislative Budget and Finance Offi ce State House Annex Room 140, PO Box 068 Trenton, NJ 08625 (609) 847-3105 · Fax (609) 777-2442