While much of the focus in recent days has been on Gov. Chris Christie’s budget proposal for the next fiscal year, several changes were also made this week to the spending plan for the current fiscal year.
Those modifications were modest compared to some recent budget adjustments enacted by the Christie administration, suggesting the state budget is now on more solid footing. And they also come as the budget’s surplus fund has been growing in recent years, which is another positive sign.
The series of routine spending adjustments and a tweak to the revenue forecast produced a slightly larger overall budget compared to the original version that was adopted in late June 2015.
In all, spending is now expected to top out at $34.06 billion by the time the 2016 fiscal year ends on June 30, acting state Treasurer Ford Scudder explained on Tuesday during a briefing with reporters that was held in the State House.
That’s nearly $300 million more than the version of the budget that Christie signed into law last June. By comparison, the budget Christie proposed on Tuesday for the fiscal year that begins July 1 totals $34.8 billion.
The revenue forecast for the 2016 fiscal year — the amount of money the state is expecting to collect from taxes and other resources — has also been lowered by less than half of 1 percent to $33.8 million.
But Scudder said that largely reflects projected losses tied to an increase of the state’s Earned Income Tax Credit that was approved by Christie and lawmakers, also in late June last year.
Boosting the benefit for roughly 500,000 low-wage workers from 20 percent of the federal version of the credit to 30 percent wasn’t officially accounted for in the final version of the budget that was enacted in June, requiring the midyear adjustment announced by Scudder on Tuesday. For the average working family, the credit will grow from $420 to $630 as a result of the change.
[related]Scudder said another $279 million in supplemental spending items have also been identified and added to the spending side of the ledger by the Christie administration since the 2016 fiscal year began on July 1.
Helping to offset those changes is $226 million in midyear lapses, which is a catchall term used by the state Department of Treasury to describe what is typically routine fine-tuning of individual budget line items that result in surpluses.
Treasury has not yet disclosed a list of the individual lapses for the 2016 fiscal year, and breakdown of the $279 million in midyear supplemental spending items has also not yet been released.
Department spokesman Christopher Santarelli said yesterday that in recent years those lists have been provided to lawmakers in advance of the treasurer’s appearance before legislative budget committees in the spring.
The Christie administration has relied on more substantial budget lapses in past fiscal years while contending with significant midyear revenue shortfalls. For example, midyear lapses during the 2014 fiscal year totaled nearly $700 million, and they reached $769 million during the 2013 fiscal year counting revenue that was freed up by delaying Homestead property tax-relief credits. The midyear lapses for the 2015 fiscal year totaled $343 million.
And as the size of the midyear lapses has been on the decline, the Christie administration has also been able to build up the budget’s surplus account, another sign of an improving state budget outlook.
For example, the opening surplus for the fiscal year 2014 budget was $375 million, while Christie’s proposed budget for the 2017 fiscal year projects an opening surplus of $787 million.
Though still just a small percentage of overall spending, if that amount holds through the end of the 2017 fiscal year, Scudder said it would be “the largest budgeted ending fund balance in a decade.”