The state’s fiscal picture was steadily improving. Then in June, with weeks until the budget was due, state forecasters delivered an astounding report: New Jersey’s tax collection estimates had improved by about $5.2 billion, more than 10 percent of the final budget.
The result was a flurry of behind-the-scenes haggling over how to spend the money. Some Democrats, whose party controls both houses of the Legislature, wanted to pay down the state’s bloated debt load or pay more into the pension system.
In the end, they did both — delivering a $46.4 billion spending plan that earmarks $3.7 billion to pay down or avoid debt, a $6.9 billion pension payment and $500 million in “add-on” spending requested by individual legislators.
“This budget presented us with an extraordinary and somewhat unprecedented opportunity to reimagine what we'd like our economy, our schools, our workplaces, and our communities to look like thanks to the dramatic about-face our economy has taken in recent months,” state Treasurer Elizabeth Maher Muoio said before the governor signed the budget into law.
The fiscal turnaround story in Florida was as well remarkably quick. In March, legislators were staring down a nearly $3 billion projected budget shortfall.
Then, in early April, state economists told legislators they would have $2 billion in unexpected revenue. That money, bundled with billions from the federal government, helped pay for things like $2 billion for state transportation projects and $500 million for a new program to combat sea level rise and flooding issues.
The record spending put Florida Republicans in the uncomfortable position of acknowledging that their state was helped by billions of dollars from a Democratic administration.
Democratic Rep. Charlie Crist, who is planning a 2022 challenge to DeSantis, lambasted the governor for touting the budget even after criticizing the stimulus package signed by President Joe Biden.
“While Governor DeSantis will try to claim credit today, the truth is that he opposed the American Rescue Plan,” Crist said in a statement. “He opposed the funding that is helping cities and schools recover from a challenging year.”
In California, state legislators were deluged with so much money that they were unable to figure out how to spend it all by the start of the fiscal year. The state's fiscal analyst advised them to wait on several decisions because the bureaucracy isn't equipped to launch so several new programs at once with the proper oversight in place.
They have moved closer to a deal with Newsom but still lack a full agreement nearly a week into the fiscal year.
Assemblymember Vince Fong, who serves as the Republican vice chair on the Assembly Budget Committee, said that the sheer amount of money that’s being considered in such a short amount of time is making the budget process even more opaque. Major issues like drought or wildfire prevention, education or broadband needs are not being considered carefully enough.
“Everything's being rushed in my personal opinion, we're not having a fully fleshed out discussion,” Fong said in an interview Tuesday. “I don't think it's productive, nor is it useful from the standpoint of actually solving problems.”
Even Rhode Island, a state that has a revenue forecasting system that is considered a gold standard by ratings agencies, saw income outpace expectations . Legislators there made a number of changes with the extra money, enacting a budget on Tuesday that exempts more businesses from state taxation on Paycheck Protection Program loans and socks away more money for affordable housing in the state.
General Treasurer Seth Magaziner said the more than $13 billion budget is much higher than prior years, but doesn't include the some $1.1 billion the state will be getting from the American Rescue Plan. Legislators are waiting until the fall to develop a proposal to spend that money, and Magaziner would like to see more done on priorities like education, workforce training and infrastructure.
“This is a real, once-in-a-generation opportunity, I think, for Rhode Island and different states across the country to use these resources to do forward looking transformational things,” he said. “I hope that Rhode Island is able to seize this opportunity, and I hope that states across the country are able to as well. This is a real chance for us to do better.”