NJ lawmaker proposes new way of estimating revenues

A New Jersey lawmaker has a plan to end some of the annual battles over the state budget.

Assembly Budget Committee chairman Gary Schaer proposes creating a three-member joint advisory board to provide a consensus forecast of state revenue collections instead of getting different projections from the state treasurer and the legislature’s budget officer.

That would help take politics out of the budget process, said Schaer, D-Passaic.

“Where one spends one’s money, how one spends one’s money, that’s a matter of policy,” he said. “What are the priorities of the state of New Jersey financially? It should not be a political discussion on what those numbers will generate themselves.”

Revenue estimates the Christie administration relied on in the last few budgets were “monstrously wrong,” Schaer said, forcing Gov. Chris Christie to reduce state contributions to the pension system to avoid budget cuts to other programs.

A consensus process for estimating state revenues would improve the budget process, according to Sheila Reynertson, a senior policy analyst at New Jersey Policy Perspective.

“Given the record of New Jersey’s last three budgets and the consequences for flawed revenue projections, a change in the revenue forecasting process is long overdue,” she said. “Consensus forecasting is much more likely to take the politics and the personalization out of budget making.”

But not everyone agrees on the merit of the Schaer’s idea.

Assemblyman Anthony Bucco, R-Morris, said it’s beneficial to hear differing revenue estimates.

“It concerns me that we might be losing a little bit of the transparency that goes on in the process, maybe not necessarily getting the one side’s reasons for why they feel the projections are inflated or maybe in fact not inflated but too low,” he said.

Supporters of the consensus forecast plan counter that it might improve New Jersey’s prospects with bond-rating agencies after eight rating downgrades within five years have led to higher borrowing costs.