(Bloomberg) -- New Jersey's Senate and Assembly sent a three-month, $7.7 billion spending plan to Governor Phil Murphy that will buy the state more time to close the massive budget shortfalls caused by business closings and record unemployment.
The unprecedented strategy to extend the current fiscal year through September cuts or shifts $5 billion in expenses. That includes a $951 million pension payment delayed until after the stop-gap measure ends in September.
Murphy, a first-term Democrat, resorted to the maneuver to contend with a projected $10.1 billion revenue loss through June 2021. To fill the gap, he is proposing to borrow at least $5 billion and wagering that Senate Republicans will drop their opposition to extending more aid to state governments, as Democrats proposed under a stimulus measure approved by the U.S. House.
The 35,000-member Communications Workers of America, New Jersey's largest public-workers union, on June 27 ratified a agreement that averts layoffs through December 2021 in exchange for furloughs through July. Murphy said that deal should save the state $100 million.
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