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NJ Budget FY2012

NJ Budget FY2012

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NJ 2012 budget
NJ 2012 budget

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FY 2012 Budget

Governor Christie’s FY 2012 Budget

Fund Core Priorities

Make Tough Choices

THE BIG THINGS:
Fiscal Discipline Pensions and Benefits Reform, and Education Reform

Provide Tax Relief

Protect The Most Vulnerable

Enhance Government Performance

Funding for Core Priorities and Tax Relief Depends on Making Tough Choices

Building Blocks for the FY 2012 Budget

Fund Core Priorities

Provide Tax Relief

Enhance Government Performance

Protect The Most Vulnerable

Make Tough Choices

Increase education aid $250 million Fulfill statutory commitment to fund pensions Preserve municipal aid Increase /reform hospital funding Preserve support for higher education

Consolidate operations Increase Homestead property tax relief

Preserve senior and disabled prescription aid

Reform public pensions and health benefits

Invest in IT infrastructure

Avoid fare increases and support expanded NJ Transit bus service

Global waiver to reform Medicaid

Privatization

Keep 4,300 lowincome citizens in their homes and apartments

Restructure General Assistance

Increase student financial aid
Fund critical infrastructure projects First State Police class in two years Protect natural resources

Reduce nursing home rate payments

Provide responsible and sustainable pro-growth business tax reform

Best Practices for local government

Expand residential and community mental health settings

Phase out DCF residential treatment centers Eliminate new funding for Urban Enterprise Zones

Performance budgeting

Increase community placements for the developmentally disabled

Funding for Core Priorities and Tax Relief Depends on Making Tough Choices

Building the FY 2012 Budget
35
Capital: $0.1, 0% Legislature and Judiciary: $0.7, 2%
Capital Legislature and Judiciary Employee Benefits, Rent & Utiliites Debt Service

30

$1.9, 7%
25 $2.1, 7%

Executive Operations

$3.6, 12% 20

Grants--in-Aid State Aid

15

$9.4, 32%

Operations Executive: includes adult prison and juvenile facilities, state police and law enforcement, human services institutions, veterans’ homes, children and families. Grants-In-Aid: includes property tax relief programs, Medicaid, PAAD, nursing home and long-term care alternative programs, and support for higher education. State Aid: includes education aid programs, municipal aid, general assistance, and aid to county colleges.

10

5

$11.6, 40%

0 $29.4 Billion

State Government Operations: $6.2 Billion (21%)

The FY 2012 Budget
(In Millions)
FY 2011 Adjusted Approp. Opening Surplus Revenues Income Sales Corporate Other Total Revenues ARRA Resources* Lapses Total Resources Appropriations Original Including ARRA Funding Supplemental Pension Contribution Total Appropriations Target Fund Balance $ $ $ 804 $ FY 2012 Budget 349 $ Change $ (455) % (56.6) %

10,076 7,775 2,320 8,091 28,262 876 605 30,547 $ $

10,528 8,078 2,430 8,338 29,374 29,723 $ $

452 303 110 247 1,112 (876)

4.5 3.9 4.7 3.1 3.9 % (100.0) %

$

$

$

(824)

(2.7) %

$

29,240 452 506 30,198 349

$

29,420 29,420 303

$

180

0.6 %

$ $

$ $

$ $

(778) (46)

(2.6) % (13.2) %

*Resources and appropriations used for budget relief that otherwise would have needed a State Appropriation

A 2.6% Reduction in Year Over Year Spending

State Budget For Past Ten Years
(In Billions)

$40.0

$35.0 $31.0 $30.0 $28.6 $28.1

$34.6 $33.9 $32.2* $30.2 $29.4

$25.0

$24.6 $23.7

$20.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Recommended FY12 Budget

*The FY 2010 Adjusted Appropriation is at the time of the FY 2011 Budget Recommendation

A Second Year of Fiscal Restraint Under Governor Christie

Federal Stimulus Funding
(In Millions)

$2,500

$2,000

$1,500

$1,000

$500

$FY 2009 Actual FY 2010 Actual FY 2011 Approp. FY 2011 Revised FY 2012 Budget Act Non-Medicaid

Enhanced Federal Medicaid Funding

The FY 2012 Budget Makes Up For The Loss of Almost $1 Billion in Federal Stimulus Funding

Christie Pro-Growth Tax Reforms
Fiscal Impact ($ Millions)* FY12 FY13 FY14 FY15 FY16

Gross Income Tax
 50% Phase-In Business Income/Loss Netting and Loss Carry-Forward Relief $23 $67 $117 $167 $200

Corporation Business Tax
 Three-Year Phase-In Single Sales Factor  Reduce S Corporation Minimum Tax 25%  Exempt “Non-Exempt” Agricultural Cooperatives  Increase R&D Credit to 100% $24 $13 $0.15 $33 $38.5 $23 $0.3 $66 $60.5 $23 $0.3 $66 $87.5 $23 $0.3 $66 $98 $23 $0.3 $66

Sales and Use Tax
 Exempt Installation and Support of Electronically Delivered Business Software $2.5 $5 $5 $5 $5

Estate Tax
 Raise Exemption to $1 Million $11.5 $23 $23 $23 $23

Economic Development
 Allow the Technology Business Tax Certificate Transfer Program to be allocated $60 million instead of the FY11 amount of $30 million $30 $30 $30 $30 $30

Transitional Energy Facility Assessment
 Phase-out over three years $62 $123 $245 $245 $245

Totals

$199

$376

$570

$647

$690

Responsible, Sustainable Tax Relief Within the Context of a Constitutionally-Balanced State Budget

FY 2012 Revenues
(In Millions)
Change to FY 2011 Approp. Act Income Sales Corporate Other** Total $ $ 9,855 7,829 2,145 8,333 28,162 FY 2011 Revised $ 10,076 7,775 2,320 8,091 $ 28,262 $ FY 2012 Estimate* $ 10,528 8,078 2,430 8,338 29,374 $ $ 673 249 285 5 $ 1,212 Approp. Act % 6.8% 3.2 13.3 0.0 4.3%

* FY2012 Revenue Estimate includes $200 million of tax cuts ** All Sales Tax and Corporation Business Tax on Energy are included in Other

Recovery Brings Modest Growth Projected Tax Revenue, But…

History of Total Revenues FY 2012 Approximates FY 2006*
(In Billions)

$33.0 $32.0 $31.2 $31.0 $30.0 $29.0 $28.0 $27.0 $26.0 $25.0 FY2006 CAFR FY2007 CAFR $28.7

$32.6

$28.9
$27.9 $28.2 $28.3

$29.4

FY2008 CAFR

FY2009 CAFR

FY2010 CAFR

FY2011 Approp. Act

FY2011 FY2012 Revised Estimate**

* Not including federal stimulus aid ** FY2012 Estimate includes $200 million of tax cuts CAFR – Comprehensive Annual Financial Report

… Projected Revenue Falls Far Short of FY 2008 Levels

Reliance on Non-Recurring Resources Reduced From 13% to 2% FY 2010 to FY 2012
(In Millions)

$4,000 $3,500 $3,000 $2,500

13%

$2,000
$1,500 $1,000

6%

2%

$500 $0 FY 2010 FY 2011 FY 2012

Spend Down Opening Surplus Revenue Related Initiatives Appropriation Related Offsets Demonstrating a Commitment to Fiscal Sustainability

Appropriations Comparison
(In Thousands)
FY 2011 Adjusted Approp. $ 5,718 19,722 61,320 1,094,201 736,529 1,114,728 10,690,619 392,274 1,495,999 5,480,003 142,934 560,408 94,725 1,160,059 1,285,818 1,778,075 1,344 $ FY 2012 Budget 5,681 19,597 62,970 1,067,483 724,875 1,093,904 10,269,187 353,671 1,269,473 5,303,300 150,730 555,367 93,253 1,185,577 1,425,206 2,003,616 976 $ Change $ (37) (125) 1,650 (26,718) (11,654) (20,824) (421,432) (38,603) (226,526) (176,703) 7,796 (5,041) (1,472) 25,518 139,388 225,541 (368) (529,610) (247,119) (1,833) $ (778,562) % (0.6) % (0.6) 2.7 (2.4) (1.6) (1.9) (3.9) (9.8) (15.1) (3.2) 5.5 (0.9) (1.6) 2.2 10.8 12.7 (27.4) (2.0) % (7.4) % (2.4) % (2.6) %

Department Chief Executive Agriculture Banking and Insurance Children & Families (a) Community Affairs Corrections Education Environmental Protection Health & Senior Services (a) Human Services (a) Labor and Workforce Development Law & Public Safety Military & Veterans' Affairs Public Advocate State Transportation (b) Treasury (c) Miscellaneous Commissions Total Executive Branch Interdepartmental Legislature Judiciary Total Appropriations

$ 26,114,476 3,343,305 77,309 663,535 $ 30,198,625

$ 25,584,866 3,096,186 75,476 663,535 $ 29,420,063

$

(a) The FY 2011 Adjusted Appropriations includes ARRA funding (b) The FY 2012 Budget includes funding for the Transportation Capital Plan (c) The FY 2012 Budget includes funding to increase the Homestead Benefit Program

Total Spending Down 2.6%; Nearly Every Agency is Reduced

School Aid
(In Millions)
FY 2011 Adjusted Approp. State Aid to School Districts Formula Aid Extraordinary Special Education Aid School Choice Aid Charter School Aid School Building Aid Debt Service Aid Assessment of EDA Debt Service Other Aid Total State Aid to School Districts Direct State Payments for Education Teachers' Pension and Annuity Fund * Post Retirement Medical Debt Service on Pension Obligation Bonds Teachers' Social Security Total Direct State Payments for Education School Construction Debt Service Total School Aid Inter-year Accounting Adjustment No Impact to School Districts Total Impact to State Budget

FY 2012 Budget

Change

$

$

7,452.3 155.0 9.8 8.5 81.3 56.1 (21.8) 130.7 7,871.9

$

$

7,670.7 162.7 22.3 13.1 77.2 58.1 (14.7) 131.8 8,121.2

$

$

218.4 7.7 12.4 4.6 (4.0) 1.9 7.1 1.1 249.3

$

$ $ $

347.7 823.1 132.1 788.7 2,091.6 547.2 10,510.7

$

$ $ $

35.6 762.1 143.4 763.0 1,704.1 397.6 10,222.9

$

$ $ $

(312.1) (61.0) 11.3 (25.7) (387.5) (149.7) (287.8)

$ $

109.0 10,619.7

$ $

(21.6) 10,201.3

$ $

(130.6) (418.4)

* FY 2011 Adjusted Appropriation includes $311.6 million for the one seventh recommended pension contribution

Total Aid to School Districts Increased by $250 Million

Municipal Aid
(In Millions)

FY 2011 Adjusted Approp. Consolidated Municipal Property Tax Relief Aid (CMPTRA) / Energy Tax Receipts Transitional Aid to Localities Open Space Payments In Lieu of Taxes (PILOT) Highlands Protection Fund Aid Total Municipal Aid $

FY 2012 Budget

Change

$

1,293.9 159.0 6.5 4.4 1,463.8

$

1,293.9 149.0 6.5 4.4

$

(10.0) -

$

1,453.8

$

(10.0)

Municipal Aid Preserved

Hospital Funding
(In Millions)

FY 2011 Adjusted Approp. Charity Care Health Care Stabilization Fund Hospital Relief Offset Payments Graduate Medical Education .53% Hospital Assessment* TOTAL $ $ 665.0 30.0 191.3 60.0 (38.7) 907.6 $ $ FY 2012 Budget 675.0 30.0 191.3 90.0 (58.7) 927.6 $ $ Change 10.0 30.0 (20.0) 20.0

*Full year impact of FY 2011 Budget decision

Hospital Funding Increased By $20 Million

Higher Education
(In Millions)
FY 2011 Adjusted Approp. Senior Public Institutions Rutgers University UMDNJ NJIT Thomas Edison State College Rowan University New Jersey City University Kean University William Paterson University Montclair State University College of New Jersey Ramapo College of New Jersey Richard Stockton College of New Jersey Subtotal Senior Publics Direct Aid Senior Publics Salary Funding Senior Publics Net Fringe Benefits Total Senior Publics County Colleges Operating Support (b) Fringe Benefits Chapter 12 Debt Service Total County Colleges Student Financial Assistance Tuition Aid Grants (TAG) Part-time TAG for County Colleges NJSTARS I & II EOF Grants and Scholarships Other Student Aid Programs Total Student Financial Assistance Other Programs Capital Grants and Facilities Support (d) All Other Programs Total Other Programs Grand Total Higher Education
(c) (a)

FY 2012 Budget $ 262.8 170.0 37.7 1.8 46.4 26.1 32.8 32.7 38.6 29.3 16.1 19.8 714.1 $ $ 621.7 1,335.8 134.8 37.0 32.2 204.0 $ $ $ Change (111.6) (111.6) (1.6) (2.0) (3.6)

$

$

262.8 170.0 37.7 1.8 46.4 26.1 32.8 32.7 38.6 29.3 16.1 19.8 714.1 733.3 1,447.4 134.8 38.6 34.2 207.6

$

$

$ $

$

$

$

$

$ $ $ $

294.3 9.6 21.1 38.9 8.6 372.5 72.7 5.0 77.7 2,105.2

$

$ $ $ $

319.5 11.7 16.4 38.7 5.8 392.1 51.3 4.2 55.5 1,987.4

$

$ $ $ $

25.2 2.1 (4.7) (0.2) (2.8) 19.6 (21.4) (0.8) (22.2) (117.8)

(a) FY 2011 Adjusted Appropriation includes $12.4 million for the one-seventh recommended pension contribution (b) Includes funding from Supplemental Workforce Fund for Basic Skills of $14.5 million in both FY 2011 and FY 2012 (c) FY 2011 Adjusted Appropriation includes $75,000 for the one-seventh recommended pension contribution (d) Includes use of off-budget fund balances totaling $8 million in FY 2012

Higher Education Protected; TAG Increased $27.3 Million

Direct Property Tax Relief
(In Millions)

FY 2011 Adjusted Approp. Homestead Benefit Program Property Tax Deduction Act Senior/Disabled Citizens' Property Tax Freeze Municipal Reimbursement - Veterans' Tax Deductions Municipal Reimbursement - Senior/Disabled Citizens' Tax Deductions $ 268.2 334.4 165.6 65.5 $

FY 2012 Budget 458.0 354.8 140.4 63.6 $

Change 189.8 20.4 (25.2) (1.9)

18.0

17.3

(0.7)

Total Direct Property Tax Relief

$

851.7

$

1,034.1

$

182.4

$458 Million to Increase Homestead Tax Relief

FY 2012 Budget Summary

Fiscal Stewardship
 2.6% reduction in total spending • Two years of reduced spending • Two years of lower taxes  Reduced reliance on one-shot revenues  Statutory pension obligations met  Defining The New Normal

Core Budget Priorities
      Education: $250 million in additional school aid Municipal Aid protected Higher Ed Aid preserved TAG increased $27 million Hospital funding increased $20 million Financing for the Transportation Capital Plan

Tax Relief for NJ’s Families and Businesses
 Homestead Benefit increased  $200 million in responsible, sustainable tax cuts to make New Jersey more competitive
Thank You!

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