Murphy touts ‘historic and direct property tax relief’ as he signs $50.6B N.J. budget

Published: Jun. 30, 2022

Gov. Phil Murphy on Thursday signed a $50.6 billion state budget that increases spending to record levels thanks to an unprecedented surge in tax revenue this year that handed Democratic state leaders a surplus of nearly $11 billion.

The massive windfall is fueling the largest property tax relief program in more than a decade, a second consecutive full payment of nearly $7 billion to New Jersey’s public worker pension fund, a state-level child tax credit, and an historic surplus of more than $6 billion to prepare the state for tough times ahead.

Murphy joined state Senate President Nicholas Scutari, D-Union, and state Assembly Speaker Craig Coughlin, D-Middlesex, to sign the spending bill Thursday during a ceremony at the school library of Cranford High School. The three Democrats negotiated the new budget largely behind closed doors, and most lawmakers didn’t see the final draft until late Monday night, just minutes before budget committees voted to approve the bill.

The governor thanked his fellow leaders who “share our commitment to a state which doesn’t just speak of meeting the needs of our residents but backs up those words with action and investment.”

“The priorities of this budget are the priorities of our families, and at the top of this list right now is affordability,” Murphy said before signing the spending plan, which covers the 2023 fiscal year that begins Friday.

At the heart of the budget is a $2 billion property tax relief program known as ANCHOR. It simplifies and expands the Homestead Rebate, and provides tax credits of up to $1,500 for homeowners and $450 checks for renters.

The initiative was part of Murphy’s original $48.9 billion budget proposal unveiled in early March. Democratic leaders in Trenton chose to expand the program after a revenue update in May that showed New Jersey would rake in a windfall of more than $9 billion in tax collections this year.

Murphy on Thursday said the new program will cut property taxes by 16% for the average homeowner.

“This will roll the clock back to about 2011 levels,” he said. “It is historic and direct property tax relief.”

The final spending plan features other, smaller “affordability” initiatives, including $60 million in fee waivers on drivers license renewals, marriage licenses and license fees for certain health care professionals, free state parks beginning Friday and a 10-day sales tax holiday on back-to-school supplies that will go into effect later this summer.

Scutari, from the floor of the Senate chamber in Trenton on Wednesday, called it “the greatest budget” in state history, a statement he repeated at Thursday’s signing.

“People across New Jersey will see significant sums of money to offset property taxes,” Scutari said. “The tax relief is unprecedented.”

But the final budget, which flew through legislative committees and the full Democratic-controlled Legislature this week after being released late Monday night, drew criticism from advocates, environmentalists, business leaders, budget experts, and policymakers statewide.

In a statement released Thursday, state Sen. Declan O’Scanlon, R-Monmouth, said the tax relief included in the spending plan isn’t enough and will take too long to get into the hands of New Jersey residents who need help now.

“The delayed and failed tax relief efforts in the Democrats’ budget when the state is ridiculously flush with funds will go down as one of the biggest missed opportunities in New Jersey history,” said O’Scanlon, who serves as the Republican budget officer in the Senate.

O’Scanlon and his fellow Republicans on the Senate Budget Committee had less than 25 minutes to review the final draft of the state budget before voting on it Monday night in a committee hearing.

New Jersey homeowners and renters won’t receive property tax rebates through the new ANCHOR program until May 2023, and a separate bill to establish the Garden State’s first child tax credit says families won’t see that credit until 2024.

“Sadly, Democrats opted for huge increases in pork spending and the establishment of massive slush funds that will do nothing to help New Jersey families suffering today from high gas prices, soaring inflation, and property taxes,” O’Scanlon said.

Legislation to use surplus and federal funds to replenish the state’s unemployment insurance fund, which received bipartisan support and seemed likely to get done this week, was also axed at the last minute. New Jersey businesses are now confronting a $300 million tax increase to replenish the unemployment fund after it was drained during the pandemic.

“Now, in addition to providing virtually no financial aid for the business community, the state is going to sock employers with a tax hike beginning in July,” New Jersey Chamber of Commerce President Tom Bracken said. “This action belies claims that there are no tax hikes in the budget and sends an enormous negative message to the business community.”

Murphy dismissed much of the criticism Thursday when speaking to reporters after the budget signing, adding that the affordability initiatives provide “dramatic relief, and some of it is in the here and now.”

“We’re doing three things that no one thought could be done at the same time: historic affordability relief, historic investment in our future and all the while being fiscally responsible,” Murphy said. “We’re getting at this in a lot of different ways. And we won’t stop. … We’ll continue to think through ways we can deliver affordability relief to our citizens.”

When asked if there’s a deal in the works after the state Senate pulled the unemployment insurance taxes bill, Murphy said he’s “always been open-minded.”

“But I also want to make sure we get the biggest bang for our buck on that,” he said.

”This is the highest batting-average budget in the state’s history. Is it perfect? No,” Murphy added. “Have we gotten to an overwhelming amount of needs that are out there? There’s no budget in our state’s history that comes close to this one in that respect. And we’ll continue to try to meet unmet needs in the years ahead.”

Left-leaning advocates were also critical of the spending plan.

For the Many NJ, a statewide coalition of advocates and policy experts, decried the lack of transparency and accountability in the budget process and said in a statement that “backroom budget deals hurt residents who need help the most.”

“I applaud this budget for its commitment to housing, education, reproductive health, and the new Child Tax Credit,” BlueWaveNJ President Marcia Marley said in a statement. “Unfortunately, it leaves out many working families, like those from our immigrant community, misses an opportunity to address the racial wealth gap, and is not bold enough on transit and infrastructure issues where we continue to ignore the need for dedicated funds.”

Nicole Rodriguez, president of left-leaning think thank New Jersey Policy Perspective, said the tax revenue windfall this year provided a “prime opportunity” to use this budget to provide support and direct relief for New Jersey’s working-class residents, immigrant families and essential workers who “have faced serious economic challenges since the pandemic.”

“Instead, their voices were shut out of the budget process, while behind-the-scenes deals secured hundreds of millions in pet projects and corporate giveaways,” Rodriguez said. “With a growing and diverse population, New Jersey should not be a state where a few powerful people make decisions that affect the many without taking their voices into account.”

Environmentalists, who were handing out fliers at Thursday’s budget signing ceremony, also say funding is lacking in the budget to help reach Murphy’s goal to reduce greenhouse gases 50% by 2030 in an effort to fight climate change.

The governor and Democratic leaders are also under fire for lifting state spending by more than 9% at a time when most economists and fiscal experts agree that an economic downturn is on the horizon, and New Jersey is approaching a fiscal cliff that will leave the state billions of dollars short of what will be needed to maintain government services.

Leaders are, however, using a substantial portion of the revenue surplus to mend the state’s battered balance sheet with a nearly $7 billion contribution to the woefully underfunded pension system, and to set aside the largest surplus in state history, $6.8 billion, to prepare New Jersey for an impending slowdown.

”Even as this budget invests in the year ahead, it is also focused on ensuring the New Jersey we leave for our kids and our grandkids is in better financial shape than it is now,” Murphy said, adding that this will help the state sustain an economic downturn and sends a message to credit agencies that “we are serious.”

Coughlin, the Assembly speaker, said this budget “is a reflection of our values. And what it says is: We put people first.”

”The truth of the matter is, If we were to count all of the people who benefitted from this budget, there would be 9.3 million people in this room,” Coughlin said, referring to the entire population of New Jersey.

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published this page in News and Politics 2022-07-01 02:32:51 -0700