"New Jersey alone, my home state, is facing a ten-and-a-half billion dollar shortfall in its 2012 fiscal budget. This means more cuts in state and local spending for education, which means our kids are hurt."
Robert Menendez on Tuesday, October 18th, 2011 in a speech
Robert Menendez says New Jersey budget shortfall means education funding cuts
After more than 20 years of public service on the local, state and federal levels, U.S. Sen. Robert Menendez should know you can’t adopt a state budget that doesn’t pay for itself.
But that’s what Menendez, a Democrat, suggested during an Oct. 18 press conference about the Teachers and First Responders Back to Work Act, which he recently introduced. The legislation is aimed at creating or protecting jobs for teachers, police officers and firefighters.
"New Jersey alone, my home state, is facing a ten-and-a-half billion dollar shortfall in its 2012 fiscal budget," Menendez said. "This means more cuts in state and local spending for education, which means our kids are hurt."
PolitiFact New Jersey found that although New Jersey is not meeting all of its statutory obligations, the fiscal year 2012 budget adopted in June is, as required by state law, a balanced spending plan with no shortfall.
As for education spending, the budget actually increases state aid for public schools over the previous fiscal year.
Tricia Enright, a spokeswoman for Menendez, acknowledged the senator was wrong to suggest there is a current budget shortfall.
"So, yes, he used the wrong tense in expressing the need to invest in educators for our kids," Enright wrote in an email. "But, the need is there and the facts – as our Senator, and most Americans see them -- are clear."
But let’s explain the history behind the $10.5 billion cited by Menendez.
In July 2010, the state’s nonpartisan Office of Legislative Services estimated a "structural deficit" of nearly $10.5 billion for fiscal year 2012. That figure represented the difference between projected revenues from existing sources and the amount needed to pay for all spending required by state law and maintain current program levels.
However, there’s a difference between what the state is legally obligated to spend and what is budgeted.
The fiscal year 2012 budget does not entirely cover the spending level used to calculate the projected structural deficit, but the budget itself is balanced between its anticipated revenues and expenditures.
In other words, there is no shortfall.
It would be "unconstitutional" to adopt a budget with a built-in shortfall, and OLS is not projecting a shortfall to occur during fiscal year 2012, according to David Rosen, the budget and finance officer for the OLS.
"A budget shortfall during a fiscal year is a different animal than a structural deficit looking forward to a budget," Rosen told us. "Those are two different concepts, really."
Elizabeth McNichol, a senior fellow at the Washington, DC-based, Democratic-leaning Center on Budget and Policy Priorities, said a state can have a structural deficit as well as a balanced budget. Once a budget is balanced, that year’s budget shortfall has been addressed, she said.
McNichol added, "Every year, a state will end up balancing its budget, one way or another."
It’s worth pointing out that Gov. Chris Christie has since rejected the use of the structural deficit, calling for a zero-based budgeting approach. In a Sept. 30 email, Andrew Pratt, a state Treasury Department spokesman, told us: "Except in theoretical terms, that means there are no longer any deficits to discuss."
Now, let’s talk about education spending under the fiscal year 2012 budget.
Menendez suggested that the budget means "more cuts in state and local spending for education." But as we’ve noted in previous rulings, the budget increases state aid for public schools by about $863 million over fiscal year 2011.
The state is not funding public schools at the total level required by law, but funding is still up year-over-year, Rosen said.
Menendez claimed New Jersey "is facing a ten-and-a-half billion dollar shortfall in its 2012 fiscal budget," meaning more cuts in state spending on education.
Although a nearly $10.5 billion structural deficit had been projected, the fiscal year 2012 budget is balanced, as required by state law. Also, the budget increases state aid for education over the previous fiscal year.
Since Menendez is wrong about there being a budget shortfall and education funding cuts, we rate this statement False.
To comment on this ruling, go to NJ.com.
Published: Thursday, November 3rd, 2011 at 7:30 a.m.
Senator Menendez Discusses Putting Teachers and First Responders Back to Work, Oct. 18, 2011
PolitiFact New Jersey, Chris Christie claims he balanced two budgets while facing $13 billion in deficits and didn’t raise taxes, Oct. 2, 2011
New Jersey Office of Legislative Services, Estimate of Fiscal Year 2012 Structural Deficit, July 12, 2010
The Star-Ledger, N.J. budget experts say Christie's 'new normal' approach on deficit is 'old', March 1, 2011
The Star-Ledger, N.J. faces $10.5B budget deficit heading into next year, July 20, 2010
Phone and email interviews with David Rosen, New Jersey Office of Legislative Services, Oct. 27 and Nov. 2, 2011
United States Senate Democrats, Fact Sheet: Teachers And First Responders Back To Work Act, Oct. 17, 2011
Teachers and First Responders Back to Work Act of 2011, Bill Summary & Status, accessed Oct. 27, 2011
New Jersey Governor’s Office, Governor Chris Christie Announces Education Allocation Plan Which Increases School Funding for Every District in New Jersey, July 12, 2011
PolitiFact New Jersey, State Sen. Jim Whelan says Gov. Chris Christie "slashed school aid in this budget,"July 11, 2011
Phone and email interviews with Elizabeth McNichol, Center on Budget and Policy Priorities, Oct. 28, 2011
Phone and email interviews with Tricia Enright, spokeswoman for U.S. Sen. Robert Menendez, Oct. 27-28, 2011
Center on Budget and Policy Priorities, States Continue to Feel Recession’s Impact, June 17, 2011
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