Bill Text: NJ ACR66 | 2010-2011 | Regular Session | Introduced

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Bill Title: Proposes constitutional amendment to reduce State budgets for two fiscal years, then cap State budget growth to annual inflation rate; requires revenue collected in excess of budget cap to be reserved in restricted reserve fund.

Sponsorship: Moderate Partisan Bill (Republican 4-1)

Status: (Introduced - Dead) 2010-01-12 - Introduced, Referred to Assembly Budget Committee [ACR66 Detail]

Download: New_Jersey-2010-ACR66-Introduced.html

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ASSEMBLY CONCURRENT RESOLUTION No. 66

STATE OF NEW JERSEY

214th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION

 

 

Sponsored by:

Assemblyman  SCOTT RUDDER

District 8 (Burlington)

Assemblywoman  DAWN MARIE ADDIEGO

District 8 (Burlington)

 

Co-Sponsored by:

Assemblymen Holzapfel and Wolfe

 

 

 

 

SYNOPSIS

     Proposes constitutional amendment to reduce State budgets for two fiscal years, then cap State budget growth to annual inflation rate; requires revenue collected in excess of budget cap to be reserved in restricted reserve fund.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel

  

A Concurrent Resolution proposing to amend Article VIII, Section II, paragraph 2 of the Constitution of the State of New Jersey.

 

     Be It Resolved by the General Assembly of the State of New Jersey (the Senate concurring):

 

     1.  The following proposed amendments to the Constitution of the State of New Jersey are agreed to:

 

PROPOSED AMENDMENTS

 

     Amend Article VIII, Section II, paragraph 2 to read as follows:

     2.  a.  No money shall be drawn from the State treasury but for appropriations made by law. All moneys for the support of the State government and for all other State purposes as far as can be ascertained or reasonably foreseen, shall be provided for in one general appropriation law covering one and the same fiscal year; except that when a change in the fiscal year is made, necessary provision may be made to effect the transition.

     b.  (1)  No general appropriation law or other law appropriating money for any State purpose shall be enacted if the appropriation contained therein, together with all prior appropriations made for the same fiscal period, shall exceed the total amount of revenue on hand and anticipated which will be available to meet such appropriations during such fiscal period, as certified by the Governor.

     (2)  Provided further, that in each of the next two State fiscal years commencing after approval of this amendment by the voters, no annual appropriation law or supplemental appropriation law or other law appropriating money from any source, for any State purpose shall be enacted for:

     (a) the first fiscal year if the appropriation or appropriations contained therein, together with all prior appropriations made for the same fiscal year, exceed 95 percent of the amount of total State appropriations enacted for the fiscal year completed prior to the approval of this amendment by the voters; and

     (b)  the second fiscal year if the appropriation or appropriations contained therein, together with all prior appropriations made for the same fiscal year, exceed 90 percent of the amount of total State appropriations enacted for the fiscal year completed prior to the approval of this amendment by the voters.

     (3) For each State fiscal year thereafter, no annual appropriation law or supplemental appropriation law or other law appropriating

money from any source, including federal funds, for any State purpose for the same fiscal year shall be enacted if the appropriation or appropriations contained therein, together with all prior appropriations made for the same fiscal year, shall exceed the amount of total State appropriations enacted for the prior fiscal year by an annual percentage change that exceeds the increase, if any, in the annual inflation rate expressed as a percentage change  As used in this paragraph, "annual inflation rate" means the annual percentage increase, if any, rounded to the nearest half-percent, in  a federally published national measure of inflation, as shall be established by law.

     c.  If the total State revenue collected for the fiscal year exceeds the fiscal year appropriation limit in subparagraph b., the excess revenue amount shall be credited to restricted reserve funds established in the Constitution.  A restricted reserve fund shall be established in the State Treasury for State revenue collected from General Fund sources and a restricted reserve fund shall be established in the Property Tax Relief Fund for revenue collected from the New Jersey gross income tax. 

     d.  The Governor shall include in the annual budget message to the Legislature an estimate of the credits to be made to the restricted reserve funds.  The Governor shall provide a report of the status of the restricted reserve funds to the Legislature periodically, but not less often than annually in the annual budget message to the Legislature.

     e.  Balances in the restricted reserve funds shall not be available for appropriation except as provided in this paragraph.  Balances may be appropriated by the Legislature only: (1) upon separate certification by the Governor that anticipated revenues in the either the General Fund or the Property Tax Relief Fund are estimated to be less than those certified by the Governor upon approval of the annual appropriation act; or (2) upon a finding by the Legislature, based on its research, that to offset revenue declines anticipated in the General Fund or the Property Tax Relief Fund that an appropriation from the respective restricted reserve fund established in subparagraph c. is a more prudent fiscal policy than imposing new taxes or increasing any rate of tax or otherwise modifying the tax structure, including elimination or modification of deductions, exclusions or exemptions.

     f.  The provisions of this paragraph shall not be construed to render balances in the reserve funds unavailable for meeting the costs of any emergency identified by the Governor.  Balances in the reserve funds are available for that purpose, provided however, that the Governor shall notify the Legislature of the Governor's determination that balances in the restricted reserve funds are required to meet an emergency, describing the nature of the emergency and the intended use of the funds in meeting the emergency.  After notification of the Legislature, such expenditures shall be deemed approved by the Legislature and appropriated for such emergency use, if the Legislature does not disapprove such use within 10 days of receipt of the Governor's notification through the passage of a concurrent resolution rejecting the proposed emergency use.  The termination of a second annual session of the Legislature pursuant to paragraph 3 of Article IV of this Constitution shall not preclude the next commencing Legislature during that 10 day period from disapproving of such emergency use.  As used in this subparagraph, "emergency" means any condition or occurrence which requires an immediate response in the protection of the life, safety or well-being of the citizens of this State, or any of them, or in the protection or restoration of property, public or private, endangered, damaged, or destroyed as a result, actual or potential, of such condition or occurrence.

     g.  If in any fiscal year there is enacted an appropriation from a restricted reserve fund pursuant to subparagraph e. of this paragraph, there shall not be enacted any imposition of new taxes or increases in existing tax rates or tax structure modifications having the effect of increasing revenues of the General Fund or the Property Tax Relief Fund, as the case may be; provided however, that there may be such a tax enactment in any such fiscal year if there is a decline in revenue collections in the General Fund or the Property Tax Relief Fund, as the case may be, that is greater than 2% of the total available resources in the either the General Fund or the Property Tax Relief Fund as certified by the Governor upon approval of the annual appropriation act for the fiscal year in which that revenue decline is anticipated and if the appropriation is found to be in the best interest of the fiscal condition of the General Fund or the Property Tax Relief Fund.

     h.  Notwithstanding the restrictions on the appropriation of the balances in the restricted reserve funds imposed by subparagraph e. of this paragraph, if balances in either the restricted reserve fund in the General Fund or the restricted reserve fund in the Property Tax Relief Fund exceed an amount equivalent to 2.5% of the amount certified by the Governor as total anticipated revenues in the respective fund upon approval of the annual appropriation act, the Governor shall send written notice of the amount of that excess to the Legislature.  The excess amount as identified in the notice from the Governor shall be available for appropriation by the Legislature only for any one or more of the following purposes: to provide a reserve fund for retirement, purchase or discharge of outstanding general obligation bonds of the State, to provide appropriations for capital projects, and to provide appropriations to reduce or offset real property taxes; provided however, that excess amount available for appropriation pursuant to this subparagraph shall not exceed an amount equal to 1% of the amount certified by the Governor as total anticipated revenues in either the General Fund or the Property Tax Relief Fund established pursuant to Article VIII, Section I, paragraph 7 of this Constitution upon approval of the annual appropriation act.  The balances in either restricted reserve fund that exceed this 1% excess balance limitation shall be included in the undesignated balance in the General Fund or the Property Tax Relief Fund, as the case may be, and shall be available for appropriation without the limitations imposed by this subparagraph h.

     i.  Notwithstanding any restrictions on the appropriation of the balances in the restricted reserve funds imposed by this paragraph, such balances shall be available for appropriation by the Legislature for any purpose permitted by law by the passage by the Legislature of a bill making such an appropriation by the affirmative vote of two-thirds of the authorized membership of each house of the Legislature, notwithstanding the provisions of Article IV, Section IV, paragraph 6 of this constitution to the contrary.

 

     2.  When this proposed amendment to the Constitution is finally agreed to pursuant to Article IX, paragraph 1 of the Constitution, it shall be submitted to the people at the next general election occurring more than three months after the final agreement and shall be published at least once in at least one newspaper of each county designated by the President of the Senate, the Speaker of the General Assembly and the Secretary of State, not less than three months prior to the general election.

 

     3. This proposed amendment to the Constitution shall be submitted to the people at that election in the following manner and form:

     There shall be printed on each official ballot to be used at the general election, the following:

     a. In every municipality in which voting machines are not used, a legend which shall immediately precede the question as follows:

     If you favor the proposition printed below make a cross (X), plus (+), or check (a) in the square opposite the word "Yes." If you are opposed thereto make a cross (X), plus (+) or check (a) in the square opposite the word "No."

     b. In every municipality the following question:

 

		REQUIRES REDUCTIONS IN STATE BUDGETS FOR TWO FISCAL YEARS AND THEN ANNUAL STATE BUDGET CAP LIMITED TO ANNUAL INFLATION RATE, WITH REVENUE ABOVE THE CAP PLACED IN RESTRICTED RESERVE
	YES	Do you approve the proposed amendment to the State Constitution which provides that all State appropriations made for the next two fiscal years shall be reduced by 5% in the first fiscal year and by 10% in the second fiscal year from the amount appropriated in the fiscal year that ended before this amendment, and that in State fiscal years thereafter that no annual appropriation law or supplemental appropriation law for a fiscal year shall be enacted, if the total appropriations enacted for that year, exceed the appropriations enacted for the prior fiscal year by a percentage change that exceeds the percentage increase, if any, in the annual inflation rate, with any State revenue collected for a fiscal year that exceeds the fiscal year appropriation limit credited to a restricted reserve fund, and any balance therein subject to appropriation under certain fiscal conditions or by the affirmative vote of two-thirds of the authorized membership of each house of the Legislature.

 

		INTERPRETIVE STATEMENT
	NO	This proposed amendment to the State Constitution provides that all State appropriations made for the next two fiscal years shall be reduced by 5% in the first fiscal year and by 10% in the second fiscal year from the amount appropriated in the fiscal year that ended before this amendment.  It imposes a State budget cap in State fiscal years thereafter under which annual appropriations could not increase by more than the percentage increase, if any, in annual inflation.  It also provides that any State revenue collected that exceeds the budget cap in a fiscal year be credited to a restricted reserve fund.  Restricted reserve funds can be appropriated only under certain fiscal conditions or if approved by a two-thirds vote of each House of the Legislature.

 

SCHEDULE

 

     This Constitutional amendment shall first apply to the annual appropriation act and supplemental appropriations enacted for the fiscal year commencing after approval of this amendment by the voters.

 

 

STATEMENT

 

     This concurrent resolution amends the State Constitution to provide that all State appropriations made for the next two fiscal years shall be reduced by 5% in the first fiscal year and by 10% in the second fiscal year from the amount appropriated in the fiscal year that ended before this amendment, and that in State fiscal years thereafter annual appropriations shall not exceed the appropriations enacted for the prior fiscal year plus a percentage increase that can not exceed the percentage increase, if any, in annual inflation.

     This concurrent resolution also will establish in the New Jersey Constitution two excess revenue restricted reserve funds, one in the State Treasury's General Fund, in which most of the State's general tax revenue will be deposited and one in the Property Tax Relief Fund in which the personal gross income tax revenue will be deposited.  Each fund would be separately credited annually with State revenue collections realized from the respective fund's taxes that are in excess of the fiscal year appropriation limit. 

     The reserve funds may be used in future years when State tax collections are lower than expected.  The reserve funds may be used instead of raising taxes.  Tax increases could still be enacted, but these reserve funds would be available to avoid tax increases.  In a year when reserve fund money is used, no tax increases may be enacted for that year, unless tax collections are in serious decline, exceeding 2% of total State resources.  If the reserve funds' balances grow, a portion of the funds' balances can be used to reduce State bond debt, build capital projects, or reduce or offset real property taxes.  Reserve funds can be used for any lawful purpose and under any circumstances if an appropriation from a reserve fund is approved by a two-thirds vote of each House of the Legislature.

     These revenue reserve funds are modeled upon the State's statutory "Surplus Revenue Fund" that exists only for general fund revenues.  The Constitutional amendment would provide for a constitutionally established fund that would supercede that statutory fund and would also establish a reserve fund in the Property Tax Relief Fund from any unanticipated, excess, gross income tax collections.