State lawmakers started the last two General Assembly sessions with massive projected state budget surpluses and $1.1 billion in federal pandemic aid to hand out.
This year, the projected surplus is a relatively modest $98 million, with talk already circulating of possible budget deficits next year.
Can lawmakers return this year to some form of belt-tightening after gorging on those past surpluses and the mostly spent pandemic windfall? The first sign will be Gov. Daniel J. McKee’s fiscal 2025 budget plan expected to be released later this month.
The Democratic governor told PBN he wants to avoid raising taxes and fees and hopes to again propose lowering the state sales tax. The latter would be popular with voters and plenty of businesses too but would also reduce state revenue.
As this week’s cover story reports, how much extra money lawmakers will have to spend in the next few years could also be affected by the state’s attempt to reactivate truck tolls on interstate highways. A federal judge halted them in 2022. The state had expected to collect about $40 million a year from the tolls.
In the last two years the tough decisions were on how much to spend on the priorities of state leaders, not whether to spend. But that party is over. Lawmakers must again show that the state can afford everything from a sales tax cut and boosting affordable housing to Medicaid reimbursement rate hikes and a host of other spending priorities with voting constituencies.
If they fail to spend wisely, this year’s small surplus will be wishful thinking a year from now.