The New Jersey Department of Treasury announced it has frozen nearly a billion dollars in spending as it grapples with the economic uncertainty surrounding the coronavirus crisis.
In a voluntary disclosure statement to state bondholders Monday, Treasurer Elizabeth Maher Muoio said the state expects “precipitous declines in revenues” in fiscal 2020 and 2021, including lower income, corporate, sales and other tax revenues.
Muoio also noted that the state expects it will have to “significantly revise” revenue and appropriations estimates for those years as contained in the Feb. 25 budget message from Gov. Phil Murphy.
She also noted issues tied to the expected extension of the state tax filing deadline from April 15 to July or later, and the possibility that stock market declines could force greater contributions to the state pension plans.
“The impact of COVID-19 on the state, its economy, and budget and finances is unpredictable and rapidly changing, but the state believes the events surrounding COVID-19 will negatively impact the state’s economy and financial condition,” Muoio said in a prepared statement.
The director of the Office of Management and Budget on Friday put more than $900 million in appropriations into reserves to ensure sufficient ability to meet emergency and required obligations, the state said in its news release.
Major items frozen include funding for the Homestead Benefit credit ($141 million), Motor Vehicle Commission ($83 million) and 50% of both the nonsalary operating budget ($78 million) and 50% of college operating aid ($71 million). The freezes also include $213 million in discretionary, special purpose and miscellaneous funding.
“It is likely that the full fiscal impact of COVID-19 on the state will change significantly as the situation further develops,” the state noted.