A Washington-based think tank finds that New Jersey is at the bottom of the barrel as far as long-term budget planning.
Only Oklahoma and South Dakota do a worse job in planning ahead financially, said Elizabeth McNichol with the Center on Budget and Policy Priorities.
To improve the process, she said, New Jersey should include three- to five-year revenue and spending forecasts in its annual budget and project how much it will cost to deliver the same level of services in future years.
“The state could build on the tax expenditure reporting it began a few years back by including estimates of more tax expenditures and requiring sunsets, expiration dates for tax exemptions and credits so that they receive regular scrutiny,” she said.
Better oversight of the way pension costs are estimated could also help avoid costly surprises, she said.
Gordon MacInnes, president of the liberal think-tank New Jersey Policy Perspective, put it more bluntly.
Pension and health benefits are a mess in the Garden State, he said, adding that lawmakers and the public need regular, comprehensive, and independent analysis of these costs.
“The technical parts of the actuarial audits needs to be translated by a third party to alert all of us to dangerous trends such as the easy enhancement of benefits without bothering to pay for them or the looming burden of retiree health benefits,” he said.
Many of the suggestions offered by the Center on Budget and Policy Priorities have been made before. Failure to implement them helps explain New Jersey’s current financial condition, MacInnes said.