Trenton – The Senate Budget Committee today voted unanimously to approve a bill to establish a revenue-advisory board to assist in the annual budget process by improving forecasting and aligning spending priorities. The new advisory board would feature forecasting experts from the executive and legislative branches and a third member from outside of government with expertise in state tax policy and revenue analysis.
“This bill is based on the findings of the Volcker Report, which recommended this type of revenue forecasting as a smart way to make revenue projections more accurate and more reliable,” said Senate President Steve Sweeney (D-Gloucester/Salem/Cumberland). “I would have preferred to do this as a constitutional amendment, but doing it through legislation is the next best way to get it done.”
The Volcker Alliance released a report in 2018 assigning New Jersey a D for budget forecasting, and noted that twenty-nine states rely on revenue forecasting from sources that typically include the governor and legislature as well as outside economic experts. The credit rating agency Moody’s Investors Service identifies consensus revenue forecasting as a top financial practice, saying it would help take politics out of the forecasting process.
The bill, S-618, would establish a joint, three-person New Jersey Revenue Advisory Board to provide consensus revenue forecasting advice for budget purposes. The advisory board would consist of the State Treasurer, the Legislative Budget and Finance Officer and a third public member jointly selected by the two State officials. The public member would have to possess expertise on state tax policy and revenue analysis, and would be prohibited from holding elective office.
“This is a smart way to modernize and improve the state’s budget practices to make revenue forecasting more accurate,” said Senator Sweeney. “It will bring more objectivity into the process in a way that will hold the executive branch and the Legislature accountable so that New Jersey’s finances are managed more responsibly.”