The amendment would limit a state spending increase to two percent above the previous year.
Assemblymen Joe Howarth and Ryan Peters introduced a constitutional amendment on July 19 that would limit a state spending increase to two percent above the previous year.
“If the latest budget cycle proved anything, it’s that the state has a major spending problem. Conversations on what taxes to raise dominated the discourse without discussions on what spending to cut,” said Howarth.
“The size of government is ballooning at untenable rates, and the people of New Jersey cannot and should not be subjected to anymore wild tax increases brought on by its growth,” he continued.
The proposed constitutional amendment would closely mirror the cap placed on New Jersey municipalities and schools that limit them from raising the local tax levy above two percent from the previous year.
“While local municipalities and schools grapple with crafting budgets that adhere to the two percent cap on raising tax levies, the state gets to play fast and loose by its own rules, raising spending, and in turn taxes, however it wants,” said Peters (R-Burlington).
“It’s the height of hypocrisy to ask local governments to adhere to a two percent cap without the state doing so as well,” he continued.
Spending increases have exceeded two percent in six of the last eight budgets. Spending in the 2019 budget will surge by $2.66 billion or an eight percent increase from the current year. The increase in spending will be felt by residents through new taxes on income, businesses, shopping bags, ride sharing, e-cigarettes, tobacco and on rentals like Airbnb.
“Trenton obviously needs to be constitutionally forced into fiscal responsibility,” Peters said. “It’s not something politicians are going to decide to do on their own. We need an unwavering standard that makes them.”
The constitutional amendment limits the amount the state can appropriate for government spending in a fiscal year to not more than two percent above the amount in the prior year with a few exceptions that are already written into the state constitution.
The exceptions include state aid to school districts, municipalities and counties, federal funds, debt service payments, capital construction projects, appropriations to the Property Tax Relief Fund and appropriations to meet emergencies from a natural disaster or an invasion.
The state can also exceed the limit by passing a fiscal emergency measure that is approved by two-thirds of both houses.
“Giant yearly spending increases need to become a thing of the past,” Howarth said. “The current state of affairs is unsustainable. The two percent cap will bring us into a more sustainable future for New Jersey.”