NJ alters fiscal year to ease coronavirus strain on budget

As the economic fallout continues from the coronavirus pandemic and associated shutdown, states are still uncertain as to what their financial situations might be as they attempt to craft their new spending plans for a quickly approaching new fiscal year, which for most states start July 1. Last month, New Jersey state leaders took a unique approach to the situation by extending the current fiscal year from June 30 to September 30. The extension addresses a number of issues.

The extension allows the state to delay adoption of their state’s new 2021 state budget by three months, allowing time for lawmakers and officials to assess the economy and state finances after the worst of the coronavirus pandemic subsides. Additionally, New Jersey, like most states with a state income tax, also extended their deadline for paying state taxes to July 15 from April 15, in order to align with the federal government’s pandemic-related 90-day extension to file federal income taxes. By extending the fiscal year to September 30, it will retain state income tax revenue in the current fiscal year, which will presumably reduce the size of the budget hole the state will have to address.

New Jersey Gov. Phil Murphy signed the bill into law on April 14. The legislation was introduced April 9 and unanimously approved by both the state Senate and General Assembly the day before the governor’s signing. State lawmakers will need to work with the governor on a supplemental appropriation to keep state government operating in July, August, and September.

The governor will need to file a revised budget proposal for fiscal year 2021 by Aug. 25. The administration’s initial FY 2021 proposal was submitted in mid-February just before stock markets fell due to the economic impact of the coronavirus.