NJCPA Applauds Bill to Revise New Jersey State Revenue Forecast and Create Advisory Board
November 16, 2021
Statement by Ralph Albert Thomas, CPA (DC), CGMA, CEO and Executive Director, NJCPA
The New Jersey Society of CPAs (NJCPA) supports Senate bill S1530, proposed by Senators Steven V. Oroho (R-24) and Paul A. Sarlo (D-36), that would alter the way New Jersey forecasts annual tax collections by providing a consensus-based model and creating a revenue advisory board.
Revising New Jersey’s revenue forecasting process would aid in accurately assessing the state’s budget since it would establish a New Jersey Revenue Advisory Board with joint legislative and executive branch control instead of being influenced by just the executive branch as is the current method. The bill, which recently cleared the New Jersey Senate Budget and Appropriations Committee, calls for the State Treasurer, the Legislative Budget and Finance Officer and a jointly selected public member to provide the Governor and the Legislature with advisory consensus forecasts of state revenues.
It is time to overhaul the way the state of New Jersey develops its annual budget, particularly in the wake of the recent $4 billion emergency borrowing related to the COVID-19 pandemic, and to better appropriate funds in the future. S1530 mandates multiyear spending projections and requires the state budget to undergo annual stress testing. The bill also calls for monthly disclosure of revenues, expenditures and cash flow, as well as an explanation of any difference in revenue estimates made by the Governor compared to the advisory consensus forecasts prepared by the board.
As an organization that represents members who serve hundreds of thousands of businesses and individuals in New Jersey, the NJCPA believes overhauling the way the state forecasts tax collections, and its implications for taxpayers, is an important issue. Nearly 30 states already have followed this route and have a similar consensus forecasting model in place.
The NJCPA stands ready to be a resource to the Legislature and Governor Murphy in helping to improve the state’s economic footing.