Now that most of the dust has settled from the debate over New Jersey’s 2015 budget, there is a small but positive step to note: the spending plan includes an increase of the state’s surplus to $388 million, $75 million higher than when the budget was first introduced in February. That means the surplus is close to 1.2 percent of budgeted spending rather than less than 1 percent – a good start towards rebuilding the surplus to help the state better weather turbulent financial storms.
In recent years the projected surplus has been questionable at the beginning of the budget year, due to historically large differences in the revenue projections of the administration and the Office of Legislative Services as well as other risks (like lawsuits challenging a proposal to divert housing funds or wild overestimation of revenue from internet gambling). But this year’s budget eliminates at least one major risk, as the difference in estimated revenues is much smaller ($32 million).
The bottom line: the larger surplus is a positive first step. The governor and the legislature should build on it by committing to increase the surplus to at at least 2 percent. While this would still be too low, it is more than double the surplus the state has kept the past few years.
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