New Jersey Abruptly Freezes Spending As It Nears Financial Disaster
by Tyler Durden
ZeroHedge.com
Sun, 06/03/2018
New Jersey Governor Phil Murphy’s administration ordered an immediate halt to state spending and hiring, because of what NJ.com describes as “an esoteric accounting maneuver caught up in charged state budget talks.”
In short, if the state doesn’t quit non-essential spending or the state Legislature doesn’t allow the Murphy administration to shuffle spending from one part of the budget to another, they risk ending next month’s fiscal end-of-year in the red, according to the New Jersey Treasury Department.
State Treasurer Elizabeth Muoio on Friday ordered the immediate hold on both spending and hiring “until further notice,” according to a news release. -NJ.com
“We have to reserve all available resources in order to ensure we close out the general fund in a positive position,” said Muoio.
While more than half of New Jersey state funding comes from the general fund, the other half is generated through gross income taxes – which are currently unable to be spent on anything aside from property tax relief. Muoio has been sounding the alarm on the general fund of late, saying it will run into the red unless she can shift $788 million in utilities revenue.
“It is essential that we freeze all discretionary spending to ensure we can support the crucial functions that keep the state operating — everything from caseworkers for children in foster care to the operation of our developmental centers to the safety and protection provided by the State Police,” she said.
The ability to shift the revenue has become a key bargaining chip in New Jersey legislature, with State Senate President Stephen Sweeny (D) demanding that the governor restore $123 million in funding to various programs which the Murphy administration previously slashed from the budget.
“The administration needs to do what they need to do. We’re not saying no. We’re just saying ‘Listen, you’ve shown us your priorities. We’d like a commitment on our priorities’,” Sweeney said Friday. “It’s part of a negotiation.”
“At the end of the day, there’s things that the Legislature feels are important and they stand for. $20 million in additional funding for people who work with the disabled and poor and needy. They’re things that matter to us,” he continued. “I didn’t think I’d have to fight with a Democrat to fund programs that help sexually abused kids.”
The Rest…HERE
