This story was updated after Senate staff provided a briefing that more accurately represented the size of the budget.
Lawmakers will introduce a $46.5 billion budget deal Monday, with the intent of hearing it in Assembly and Senate Committees on Tuesday.
That sets the bill up for full votes in both chambers on Thursday, a little less than a week before the June 30 deadline.
The budget deal reached by top Democrats in Trenton will include a multi-year $3.7 billion lockbox fund to pay down existing debt and forgo future borrowing, according to senior legislative sources.
The fund is split into two parts, with the lion’s share, about $2.5 billion, meant to pay down existing obligations. Officials have identified roughly $3.2 billion in debt that could be paid down early. Doing so could save the state hundreds of millions of dollars over proceeding years.
The remaining funds will be used to allow lawmakers to avoid future borrowing. For example, instead of borrowing $1.2 billion for a new program, they could instead pull money out of the lockbox fund.
Earlier Monday, the New Jersey Globe reported lawmakers would pay $505 million into the pension on top of the $6.4 billion payment Gov. Phil Murphy proposed in February.
The bill will include a boost to school funding, though the size of that appropriation is unclear.
Much of this year’s $10 billion surplus, one fueled by better-than-expected collections and $6 billion in federal aid, will stay in reserves.
The debt defeasance lockbox fund is like a surplus, but its funds can only be used to pay down or prevent debt, and any spending must be approved by the Treasury.
About $2 billion is going into the state’s rainy-day fund, bringing the state’s reserves to just under $6 billion. That’s without counting money in the unrestricted surplus, the Undesignated Fund Balance.
It’s not clear exactly how much will go into that fund, but it’ll be in the hundreds of millions.