Talk of the state’s $10 billion surplus was everywhere at this week’s ReNew Jersey Business Summit & Exposition, as many in attendance said the size was too big — and that the money would be better served funding a number of business-centric initiatives.
On Thursday, the Department of the Treasury pushed back on the argument, noting that the state’s surplus is below the national average, according to the latest figures from the National Association of State Budget Officers.
According to NASBO, the national average for fund balances for states is 24.7% and the median is 26.9%. The surplus Gov. Phil Murphy suggested in his 2023 budget address would be 18.9% of the budget.
While giving the keynote address at the summit Tuesday afternoon, Murphy said the proposed $10 billion surplus would give the state a cushion for any downturn in economic conditions — something most analysts feel is coming in one way or another.
Treasury spokesperson Darryl Isherwood pushed the case Thursday.
“The governor’s proposed surplus is 16 times greater than the average surplus under the prior administration and more than 20 times greater than the surplus we were left with under the previous administration’s final budget,” he said.
“Our proposed $10 billion surplus puts New Jersey in a better position to withstand any future decline in state revenue as a result of a potential recession or any other unexpected change in economic conditions and continue providing key services.”
Business leaders said the surplus could be used on initiatives that would fuel additional revenue — or help replenish the Unemployment Insurance fund.
“I understand you need to have a reserve, but the other side of that is, by investing in some of the things that need investments in, you might prevent the ultimate reason to tap those reserves,” New Jersey Chamber of Commerce CEO Tom Bracken said.
Isherwood said the advantages of having such a surplus means more than just a rainy-day fund.
“The increased surplus under this administration has been a major factor in our recent credit upgrades — three in the past 12 months — just as a low surplus was a factor in the string of credit downgrades under the previous administration,” he said.