TRENTON – In an effort to ensure that the state has the ability to maintain services and provide necessary assistance to residents in a variety of economic conditions, the Senate Economic Growth Committee advanced legislation sponsored by Senators Troy Singleton and Shirley Turner that would require a stress test analysis every three years.
“Implementing preventative measures, such as stress testing, will allow our state government to be better prepared and protected during economic downturns,” said Senator Singleton (D-Burlington). “Budget stress tests help states estimate and prepare for the potential financial pitfalls that could result from sudden emergencies, like the COVID-19 Pandemic, for example. Proactive consideration of future possibilities, and the preparation of solutions, will help to minimize future disasters.”
The bill, S-1411, would require the Department of Treasury to conduct and report upon a stress test analysis every three years evaluating the ability of the state to maintain services and provide assistance to residents. The analysis would include long- and short-term projections of major funding sources, an analysis of expenditures that are likely to increase or decrease based on future conditions, an accounting of the state’s reserves, and options available to the state to respond to and mitigate future economic recessions.
“The creation of a state budget should take into account the state’s competency in various economic conditions. A critical lesson we must learn after facing this pandemic is to implement cautionary measures for unprecedented and unpredictable circumstances,” said Senator Turner (Hunterdon/Mercer). “This legislation will provide that the economic condition of the State remains well-prepared for any unforeseen crises or economic downturns.”
The bill was advanced in a unanimous vote.
