TRENTON, N.J. — New Jersey is on the brink of a “fiscal meltdown,” Gov. Phil Murphy warned again on Wednesday as the state continues to battle the coronavirus outbreak and its financial effects.
Speaking during a coronavirus briefing, the governor urged lawmakers to pass a bill that would give New Jersey the ability to go to bond markets for an “emergency infusion of cash.”
The state Assembly passed the bill in June that would allow New Jersey to borrow $5 billion in bonds to help close a massive gap in revenue caused by the pandemic. The state Senate has not yet taken up the measure.
The state Department of Treasury projected in May an estimated $10 billion shortfall in tax revenue through the fiscal year 2021 because of restrictions on businesses that were imposed to slow the spread of coronavirus.
If bonding authority is not allowed, Murphy warned that funding for law enforcement, public education, public health workers, property tax relief for the middle class, tuition assistance, family support programs and programs for under-served communities could all be on the chopping block.
“It is well past time to secure the funding that is threatening our ability to have in place the programs and safeguards our residents, and our communities, desperately need to recover from this emergency and get back to work. It’s time to post this bill for a vote,” the governor said.
Murphy also reiterated his belief that the fiscal crisis created by COVID-19 is not something that can be resolved simply by slashing the budget.
“I’ve already offered painful cuts and negotiated hundreds of millions of dollars in savings with our labor partners,” Murphy said. “This is a multi-billion-dollar hole – the level of cuts would set our state well back.”
Last week, Murphy signed a nearly $8 billion stopgap budget that included $1.2 billion in cuts to previously authorized spending.
The three-month spending plan runs through Sept. 30, the new fiscal budget deadline Murphy and the Democrat-led Legislature enacted because of falling state revenues stemming from the outbreak.
This story comprises reporting from PIX11’s Stephen M. Lepore and the Associated Press.