Capitol Report

Capitol Report

December 5, 2022

Disciplinary Oversight Committee’s proposed budget increase problematic, says NJSBA

The New Jersey State Bar Association lodged its opposition against the state Supreme Court Disciplinary Oversight Committee’s proposed 2023 budget. The budget includes a $27 increase in the annual assessment for attorney registration, bringing the assessment from $148 to $175.

The DOC proposed the increase to address an anticipated reduction of the reserve due to budget deficits from past years. The NJSBA disputes this analysis, however. “The deficits ­projected with each budget over the past several years have been significant, and, yet, at the end of the 2021 fiscal year, they do not appear to have been realized,” said NJSBA President Jeralyn L. Lawrence in a letter to the clerk of the Supreme Court.

The budget proposal shows an almost 68% allocation of salary to the so-called Fringe Benefit Rate, which includes health benefits, pension costs and other insurance-related expenses. The Association pointed out that this figure has increased by 21% in the last three years. “Fringe benefits simply cannot be such an enormous percentage of salary,” said Lawrence. “It is unprecedented and not sustainable.” The NJSBA encouraged further negotiations to reduce the rate or a reduction in staff to keep personnel expenses and operating costs manageable.

A review of past budgets, according to the Association, demonstrate that actual deficits have been significantly less than projections and reserves have hovered at around 30%. That has been the trend since at least 2015, said the Association, which pointed out that the budgets are difficult to review because they are publicized without actual numbers, but rather projections. Nevertheless, the goal for the reserve has been 10% of the operating budget, which would suggest the projected reserve at almost 30% is unnecessary.

The NJSBA further urged the Court that a restructuring of the Attorney Discipline Budget should include the actual numbers for revenue, expenses and the beginning and ending reserve amounts for the past five years “in order to provide a realistic picture of the disciplinary system’s operating costs and reserves.”

The Association has historically opposed such increases because of the large reserves and over-projection of deficit numbers.

This is a status report provided by the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as amicus in appellate court matters.