of New Jersey
WHEREAS, the State of New Jersey continues to confront a multi-billion dollar structural budget deficit caused by many years of bipartisan fiscal mismanagement and short-sightedness; and
WHEREAS, despite the significant challenges posed by that continuing structural imbalance, this administration has succeeded, working cooperatively with the Legislature, in making great strides to reduce the State’s reliance on non-recurring sources of revenue to fund recurring State expenses; and
WHEREAS, in past years, surplus funds generated by unanticipated revenue growth or savings achieved through operational efficiencies were immediately redirected to new or expanded programs, postponing hard but overdue choices on budget reductions; and
WHEREAS, repeated past failures to make those difficult choices and reductions has resulted in funding gaps that further exacerbate the State’s precarious structural budget imbalance; and
WHEREAS, New Jersey can no longer afford to merely get by, year after year, by focusing narrowly on the short-term finances of the State; and
WHEREAS, the temporary fixes and stopgap measures that have been relied upon in past fiscal years to manage the State’s finances can no longer be tolerated; and
WHEREAS, from the outset of the administration, I have emphasized as one of my highest priorities that recurring revenues must meet or exceed recurring expenses; and
WHEREAS, now more than ever, it is not only prudent, but imperative, that the State’s finances be managed responsibly, with a focus on maximizing debt reduction and restricting State expenditures to levels matching or within recurring revenues; and
WHEREAS, as Governor, I have a responsibility to ensure a balanced budget, manage the operations of State Government effectively and efficiently, and maintain necessary government programs and assistance to the public; and
WHEREAS, Article VIII, Section II, paragraph 2 of the New Jersey State Constitution (1947) requires that State government expenditures do not exceed available State revenues; and
WHEREAS, N.J.S.A. 52:27B-31 and -26 empower the Governor to prohibit the expenditure of existing or future appropriations, and to set aside necessary reserve funds, if necessary to avoid a budget deficit and to guard against extravagance, waste, or fiscal mismanagement in the administration of any State appropriations; and
WHEREAS, the time has come to build upon the foundation laid in the last three budgets and create a mechanism to help eliminate the practice of relying upon non-recurring revenues to fund recurring expenses of State government;
NOW, THEREFORE, I, JON S. CORZINE, Governor of the State of New Jersey, by virtue of the authority vested in me by the Constitution and by the Statutes of this State, do hereby ORDER and DIRECT:
- For purposes of this Order:
a. “Appropriations of the State” means the aggregate amounts appropriated from the certified revenue of the State in the general appropriation law and all other laws supplementing the general appropriation law that appropriate money for any purpose in a fiscal year.
b. “Certified revenue of the State” means the revenue certified by the Governor pursuant to Article VIII, Section II, paragraph 2 of the Constitution of the State of New Jersey.
c. “Recurring revenue of the State” means the portion of revenue determined by the State Treasurer in consultation with the Office of Management and Budget, and as set forth in a certification by the Governor separate from and in addition to the certification required pursuant to Article VIII, Section II, paragraph 2 of the Constitution of the State of New Jersey, as recurring revenue of the State.
- For fiscal years beginning on and after July 1, 2008, the State Treasurer, in consultation with the Office of Management and Budget, shall prepare an estimate of the recurring revenue of the State for each fiscal year. For fiscal years beginning on or after July 1, 2009, a certification setting forth such estimate shall be prepared for inclusion in the Governor’s annual budget message to the Legislature for the year for which the Governor is making the budget recommendation.
- In presenting the annual budget message, the Executive Branch of State Government shall not request or recommend appropriations of the State in an amount in excess of the certified amount of recurring revenue of the State for the fiscal year for which the budget recommendation is made, except as provided in this Order and in P.L.2008, c.22.
- The certification of recurring revenue of the State required pursuant to section 2 of this Order shall be appended to the general appropriation law upon enactment thereof.
- Recurring revenue of the State may be recalculated and recertified from time to time during the fiscal year, if appropriate.
- For fiscal years beginning on and after July 1, 2009, it shall be the recommendation of the Executive Branch that any certified revenue of the State that is in excess of the amount of recurring revenue of the State shall not be available to support appropriations of the State, but rather shall be credited or appropriated to the “Long Term Obligation and Capital Expenditure Fund” for the purposes of paying for State capital improvements and the costs thereof, retiring and defeasing debt and the costs thereof, or making supplemental payments to reduce the unfunded post-retirement health benefits liability for members of and to reduce the unfunded pension liabilities of the Public Employees’ Retirement System, the Teachers’ Pension and Annuity Fund, the Police and Firemen’s Retirement System, the State Police Retirement System, and the Judicial Retirement System, and the costs thereof, and making supplemental payments to reduce the unfunded post-retirement health benefits liability for members of the Alternative Benefit Program, and the costs thereof.
- The provisions of this Order shall not be construed to render any balances in the “Long Term Obligation and Capital Expenditure Fund” or any other fund unavailable for meeting the costs of any emergency which requires an immediate response in the protection of the life, safety, or well-being of the citizens of this State, or to affect the Governor’s constitutional obligations to take care that the laws be faithfully executed and otherwise to act in the best interests of the people of the State.
- This Order shall take effect immediately and shall continue in full force and effect until rescinded or modified by the Governor, or superseded by statute.
GIVEN, under my hand and seal this 30th day
of June Two Thousand and Eight, and of the
Independence of the United States, the Two
Hundred and Thirty-Second.
/s/ Jon S. Corzine
/s/ Edward J. McBride, Jr.
Chief Counsel to the Governor