The Governor's Budget is divided into major sections that provide information on a broad range of budget related topics, including anticipated state revenues, gubernatorial policies, and new initiatives. The major sections are described below:
Governor’s Budget Message
The Governor’s Budget Message describes in general terms the policies and new initiatives, as well as the reductions and efficiencies, in the Governor’s Budget. The Governor’s Message proposal generally includes a description of the State's economic situation and the expected impact of projected economic trends on the state’s fiscal condition. The Governor’s Message may also include broad programmatic goals for each of the individual State departments or major segments of the government, as well as policy directions for the upcoming fiscal year.
Summaries of Appropriations
The Summaries of Appropriations Section of the Budget includes a selection of tables and charts designed to summarize the Governor’s recommendations and highlight the major changes included within the Budget. For instance, the Budget Summaryprovides a summary of total revenues and recommendations for each of the State’s major fund categories, such as the General Fund, Casino Revenue Fund, and Property Tax Relief Fund. This section also includes a number of tables that explain the Governor’s recommendations at various, significant levels of aggregation:
Summary of Resource and Appropriation Recommendations
Major Increases and Decreases of State Appropriations
Summary of Appropriation Recommendations by Fund
Summary of Appropriation Recommendations by Organization
Summary of Appropriations by Category or Purpose
Summary of Appropriations - Dedicated Funds
Summaries of Revenues, Expenditures and Fund Balances
The Summaries of Revenues, Expenditures and Fund Balances Section provides an overview of the economy, revenue outlook, and the impact that anticipated economic trends will have on the State’s revenue estimates. The tables included within this section highlight the State’s major revenue sources (such as the income tax, sales tax, and corporation tax), and provide year-to-year comparisons and projections. Most of the schedules and exhibits in this section are displayed by fund. For the purposes of State financial accounting, funds are accounting entities that segregate financial resources according to the purposes for which they may be used.
This section also includes four “major schedules” that provide details of actual and estimated revenues and expenditures by department. Within each department, individual revenue sources are shown, including those which are dedicated to support specific functions or programs and are derived from fees, fines, or charges for services, established by law or agency regulation.
- Schedule I depicts anticipated revenue which, together with the estimated beginning Undesignated Fund Balance (Surplus), provides the resources for the recommended appropriations summarized in Schedule III (Expenditures Budgeted).
- Schedules II & IV enumerate estimated revenues and expenditures on an as received basis over and above the general revenues and specific line item appropriations shown in Schedules I & III.
Department and Branch Recommendations
The Department and Branch Recommendations Section is the largest section of the Budget and includes the greatest detail on proposed appropriations. It is divided into categories based on the source and use of appropriations which is then organized by governmental branch, and sorted in alphabetical order by agencies or executive departments. The major subdivisions of this section are summarized below:
- Budget Recommendations Overview
The Budget displays all of a department’s non-debt appropriations in a single subdivision of the document. The separate subdivisions for Direct State Services (i.e. funds to support operations), Grants-In-Aid, State Aid, and Capital Construction are illustrated together in a consolidated display. Appropriations for Dedicated Funds (e.g. Property Tax Relief Fund, Casino Revenue Fund, etc.) are also included in the consolidated departmental presentation. An aggregate view of appropriation recommendations impacting State Aid, the Casino Revenue Fund, etc., are presented as summaries in the Summaries of Appropriations section.
This consolidated presentation provides readers with a comprehensive view of all of a department’s operations, across all spending categories and funds and provides New Jersey citizens with a better understanding of the relationships among all of the recommendations affecting departmental programs.
Each of the subsections of the Budget Recommendation section follows a consistent hierarchical order: Department, Program Category, Statewide Program, Organization, and/or Program Classification. Individual departmental presentations are grouped by “Statewide Program”, which represents a high-level, functional grouping of related programs contributing to a broad statewide objective. Statewide Programs generally span several departments. Examples of Statewide Programs include Public Safety and Criminal Justice, Natural Resource Management, and Parole and Community Programs.
Below Statewide Programs, the Budget presentation is further broken down into “Program Classifications,” which represents a lower level, operating program function consisting of closely related activities with identifiable objectives or goals. Examples of program classifications in the Department of Environmental Protection include Water Supply Management; Forestry Management; and Shellfish and Marine Fisheries Management. Detailed descriptions of agency program classifications are provided at the beginning of each statewide program presentation within a department, along with objectives for the entire statewide program.
As an example, in the Department of Labor and Workforce Development, all programs are grouped under the broad “Program Category” of Economic Planning, Development, and Security. They are further divided into the following three Statewide Programs: (51) Economic Planning and Development, (53) Economic Assistance and Security, and (54) Manpower and Employment Services. Each of these Statewide Programs is made up of a number of individual program classifications. Program Categories and Statewide Programs generally span multipledepartments.
The programmatic hierarchy of two State departments, Banking and Insurance and Labor and Workforce Development, can be seen by clicking here. Note that the Statewide Program called Economic Planning, Development, and Security is common to departments.
- Department and Branch Recommendations (Direct State Services, Grants-In-Aid, State Aid, and Capital Construction)
Department and Branch Recommendations is the subdivision of the Budget that relates to the appropriations and expenditures that support operations of State agencies, grants to individuals, and aid to local government jurisdictions. In addition to appropriation and expenditure data, agency objectives, and descriptions of agency programs are detailed. Federal and non-State funds are also included.
Each statewide program presentation provides data on the number of employees and funded positions within each department. The actual number of employees reported may be less than the number of positions allocated to an agency and is dependent upon authorized hiring levels and other factors. Position and personnel data are summarized by funding source and by program classification, and include information on the current year, two prior years, and a projection for the year to come.
The appropriations data includes detailed funding recommendations from the General Fund and Dedicated Funds by program classification, fund category (Direct State Services, Grants-In-Aid, State Aid, and Capital Construction), and object of expenditure.
The General Fund represents the collection of all State revenues not otherwise restricted by statute. There are four major funds dedicated by the Constitution for specific purposes:
- The Property Tax Relief Fund, financed by the personal income tax, provides aid to local schools and municipalities as well as to the Homestead Rebate Program, which offsets a portion of an individual’s property taxes.
- The Casino Revenue Fund, the proceeds of a tax upon casino revenues, funds new or expanded programs for the elderly and the disabled.
- The Casino Control Fund represents the cost of regulating the casino industry as charged to that industry.
- And the Gubernatorial Elections Fund consists of designated contributions by taxpayers for the public financing of gubernatorial elections.
By examining changes in the program classification recommendations as against prior year spending levels and other programs, readers will be able to ascertain savings and efficiencies as well as the relative priority that is being placed on specific agency program activities.
Various fund appropriations are broken down into categories based on how the appropriations will be used.
- Direct State Services represents funding to support the administration and direct operation of State programs. Objects of expenditure such as state employee salaries, materials and supplies, such as paper, printing, services other than personal (telephones, postage, software, consultant services), maintenance, equipment, and special purpose accounts are included in this category.
- Contracted services, such as the operations of motor vehicle agencies, are also paid out of Direct State Services.
- Grants-In-Aid appropriations represent funding of grants made to individuals and various public and private agencies for services that are considered to be the overall responsibility of the State, but that are provided for by third parties. The largest grant-in-aid program is Medicaid, but others include block grants to senior public colleges and universities, subsidy assistance to New Jersey Transit, and tuition assistance programs. The State’s Homestead Rebate program and the Direct School Tax Relief program are also funded in the Grants-In-Aid component.
- State Aid is the recommendation for payments by the State to or on behalf of a local unit of government (county, municipality, or school district) to assist this local government in carrying out its responsibilities. The largest state appropriations are for aid to local schools.
- Capital Construction contains the recommendations, by capital project within department, for current (pay-as-you-go) projects, as opposed to those funded by long-term bonds. A capital project includes the acquisition of land, new structures and equipment, and other projects whose estimated cost of land, planning, furnishing, and equipping is estimated to be $50,000 or more. Projects or acquisitions under $50,000 are appropriated in the maintenance or additions, improvements, and equipment accounts in Direct State Services.
- Language Recommendations, the final, significant item of this budget subdivision, are included at the end of statewide program or departmental presentations. These language provisions are as significant as the fiscal recommendations because they provide the Department, the Legislature, or the Director of the Division of Budget and Accounting with specific budget and/or spending authority or establish limits on such authority. It is through budget language that prior year balances are appropriated for current year expenses or lapsed and departments are provided incentives allowing them to retain a fine or fee revenue above a specific predetermined amount.
- Debt Service
The Debt Service subdivision of the Budget Recommendations section depicts the amounts necessary to pay principal and interest due on capital projects financed by general obligation bonds of the State. The primary method for financing capital projects is through the sale of bonds. No debt can be issued by the State without approval by a majority of the legally qualified voters. This section also includes a brief description of the active bond issues financed by current Debt Service appropriations.
- General and Federal Fund Language Provisions
The General and Federal Fund Language Provisions subdivision of the Budget establishes authority beyond the specificity of the detailed line-item budgets for both general and federal funds. These provisions apply to broad areas of the budget, such as entire funds, or appropriations in general, and in some cases mandate additional administrative requirements related to the enactment of the Budget. These Language provisions also authorize adjustments for reorganizations and corrections to the Appropriations Act after its enactment.
- Revolving Funds
Revolving and Other Funds is the subdivision of the Budget that depicts programs or agencies not provided with direct appropriations, but which rather operate from fees charged for services or commodities provided to other State agencies. Examples include print shops, laundries, and information processing services.
The Appendices includes Statements of Estimated Revenues; Expenditures and Fund Balances of the State’s Special Revenue, Capital Projects, and Trust Funds (excluding Pension Trust Funds). The statements include the actual revenues and expenditures for the fiscal year presented in accordance with generally accepted accounting principles, as well as estimated amounts for the upcoming fiscal years.
- Special Revenue Funds (Appendix 1A) are used to account for proceeds of specific revenue sources (other than special assessments, expendable trusts, or for major capital projects) that are legally restricted to expenditures for specified purposes
- Capital Projects Funds (Appendix 1B) are used to account for financial resources to be used for the acquisition or construction of major capital facilities for State use. Funds granted to other units of government for facilities are not classified as Capital Project Funds and are included as expenditures of Special Revenue Funds. Various Capital Projects Funds include funds both for capital facilities for State use and for grants to other units of government.
- Private Purpose Trust Funds (Appendix 1C) are used to account for assets held by the State in a trustee capacity for individuals, private organizations, other governments and/or other funds.
- Other exhibits in the appendix include a listing of programs eligible for support from the Lottery Fund in addition to other special summaries.