New Jersey Gov. Phil Murphy is expected to offer a full payment to the chronically underfunded pension system for the first time since 1996, a sign that the pandemic’s hit on all state finances has failed. is not as brutal as officials originally feared. .
Mr. Murphy, a Democrat, will demand a payment of $ 6.4 billion from the retirement system in his budget speech on Tuesday, senior officials in his administration said. The Murphy administration has ramped up pension payments and originally intended to make a payment of $ 5.76 billion for the fiscal year that begins in July.
In New Jersey, as in many other states, tax revenue has exceeded previous forecasts. When the pandemic struck, projected state revenues would drop dramatically. State revenues ended up falling 1.6% in fiscal 2020 and were 3.4% lower than forecast before the pandemic, according to the National Association of State Budget Officers. While states expect revenues to decline 4.4% in fiscal 2021, which ends on June 30 for the most part, 18 states are seeing higher than expected revenues.
Federal assistance to businesses and households has helped support income and consumer spending in the United States. Unemployment fell and economic activity picked up much faster than expected.
State and local government budget deficits have been at the center of discussions in Washington since last spring on what to include in another economic relief program.