NJBIA Chief Government Affairs Officer Christopher Emigholz testified on Monday in favor of legislation mandating stress testing for the state's financial resilience. The bill, S-1411, sponsored by Sen. Troy Singleton (D-7) and Sen. Shirley Turner (D-15), was unanimously approved by the Senate Economic Growth Committee.
The proposed legislation requires the Department of the Treasury to conduct a triennial stress test analysis to assess New Jersey's capacity to maintain services and support residents under varying economic conditions.
Emigholz emphasized that the bill would enhance budget transparency and provide legislators with better information during the state budget process. "Anything we do to shed more light on our budget process, more light on our spending and revenue situations, is good for all taxpayers," he stated.
The stress test analyses mandated by the bill must include:
- Long- and short-term projections of major funding sources, including revenues from significant taxes and federal government funding
- A comparison between projections of major funding sources and historical trends
- An analysis of expenditures likely to change under different economic conditions
- An accounting of state reserves, including amounts in the "Surplus Revenue Fund"
- Options for mitigating or lessening the impact of economic recessions
The Treasury Department would be required to make these analyses publicly accessible online. Additionally, the Governor would need to incorporate these findings into his annual budget message.
