New Jersey Assembly Bill ACR50

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Amends State Constitution to prohibit State from using bonds to balance State budget.

Impact

If passed, ACR50 would amend Article VIII, Section II of the New Jersey Constitution to ensure that no funds drawn from state treasury will include revenue from bonds used for operational expenses. By enforcing that appropriations must be made only from anticipated revenues or taxes collected, it would aim to prevent future administrations from delaying financial accountability and to mitigate reliance on debt that jeopardizes future fiscal health. Funding for state projects funded by bonds would thus be restricted only to capital projects, thereby limiting financial maneuverability but enhancing budget integrity.

Summary

Assembly Concurrent Resolution No. 50 (ACR50) proposes a significant amendment to the New Jersey State Constitution, aimed at reinforcing fiscal responsibility within the state's budgetary processes. The bill seeks to prohibit the use of borrowed funds, specifically through the sale of bonds, to balance the state budget. It stipulates that proceeds from bond sales cannot be considered revenue for the purpose of ordinary state budget appropriations, with the exception being new capital projects that have not been previously authorized. This legislative measure is a response to concerns about the state's budget practices where bonded indebtedness has been increasingly used to manage operating costs.

Contention

Supporters of ACR50 argue that it is essential to protect the balanced budget provision, which has been undermined by trying to balance expenses using short-term revenue from long-term bonds. Critics, however, fear that this amendment could limit the state's ability to respond flexibly to financial shortfalls, particularly in times of crisis where immediate funding might be necessary. There are concerns that without the ability to leverage bonds for operational expenses, it would constrain the state’s financial strategies, especially regarding funding for urgent public services.