Murphy Signs $7.7 Billion Budget for ‘Fifth Quarter’ of New Jersey’s Fiscal Year

(Bloomberg) -- Governor Phil Murphy signed a $7.62 billion stopgap spending bill for an unprecedented “fifth quarter” for the current fiscal year to help the state navigate a projected $10.1 billion revenue shortfall.

The plan cut almost $2 billion in spending planned prior to the novel coronavirus outbreak, which left New Jersey the second-hardest hit state, behind New York. The budget includes a 5% across-the-board reduction in non-salary operating costs and a 10% cut in discretionary grants, according to the governor’s office.

The legislature had sent him a $7.7 billion plan.

Murphy, a first-term Democrat and retired Goldman Sachs Group Inc. senior director, extended the current fiscal year three months, through September, and shortened the next to nine months to help address the expected $10.1 billion shortfall through June 2021.

The administration expects to have a $954 million surplus on Sept. 30. “We need a bigger cushion,” Murphy said at a Trenton news conference. “We must have the flexibility to borrow essential funds.”

He asked the state Senate to follow the state Assembly, which on June 4 approved a bill authorizing at least $5 billion in short- and long-term borrowing, including via the U.S. Federal Reserve’s Municipal Liquidity Facility.

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