Treasury officials project New Jersey’s revenues will drop by roughly $10 billion over this year and 2021.
While little remains known about the overall state of New Jersey finances, Treasurer Elizabeth Muoio made clear the situation was dire Friday.
“I know I don’t have to tell New Jerseyans this, but it has not been easy,” Muoio said during Friday’s COVID-19 briefing. “Our challenges, like yours, are real, and quite frankly, they’re like nothing most of us have ever witnessed been before. There isn’t going to be one easy solution. We will need a multifaceted approach, and it’s going to require some tough decisions.”
Muoio gave few details about the specific declines seen in the state’s budget — more specific projections will be released around 1:30 p.m. Friday — but she said the state’s sales tax revenue is projected to decline by 33% between May and July, as compared to last year.
The largest sales tax decline during the great recession was 18.4%, the treasurer said.
The state’s surplus and rainy-day fund are both going to be depleted, and the extent of the fallout on next year’s budget won’t be known for months.
State officials are hoping for additional federal aid to shore up next year’s budget, though they’re not anticipating the same for a planned three-month budget year extension.
“Our road ahead is going to require a combination of serious budget tightening, critically-needed borrowing and federal assistance, much more robust federal assistance,” Muoio said.
The Treasury is planning to deappropriate $1.3 billion in spending.
Murphy on Thursday announced the state government was relaxing its rules on furloughs and allowing employees to voluntary furlough themselves in a bid to prevent layoffs.