New Jersey Should Adopt Consensus Revenue Forecasting in State Budget Negotiations
July 26, 2018
Statement by Ralph Albert Thomas, CPA (DC), CGMA, CEO and Executive Director, NJCPA
The passage of New Jersey’s state budget on July 1 was not the smoothest process, to say the least. At the New Jersey Society of Certified Public Accountants (NJCPA), we strongly support Senate President Stephen Sweeney’s legislation to add a public ballot question to create a revenue certification board that would include the state treasurer, the Office of Legislative Services’ (OLS) budget officer, and a public member to be selected by the treasurer and the OLS budget officer.
In an NJCPA survey after the budget passage this month, almost 80 percent of the 321 respondents said New Jersey should adopt consensus forecasting for future state budget negotiations.
The survey is a telling sign that state businesses and residents want a more fair and competitive approach to determining state budgets instead of it lying solely in the hands of the Governor. The annual battles between the Legislature and the Governor over revenue projections must come to an end. The process has become politicized and lacks fiscal objectivity. It distracts from the important goal of writing sound budgets.
Government groups and rating agencies alike support consensus revenue projections. The Volcker Alliance, a group that advocates for sound budgeting practices, testified earlier this week in favor of putting Sweeney’s proposal before voters. It also gave New Jersey a “D” grade in revenue forecasting. Consensus revenue forecasting, after all, is already used by 29 states.
To add a public ballot question to this year’s November election, the Assembly must pass the legislation by Aug. 6. We strongly urge Assembly Speaker Craig Coughlin to post it for a vote. It has already passed the Senate.