Murphy unveils $48.9B N.J. budget with property tax rebates, free state parks, big spending on pensions, schools

Published: Mar. 08, 2022

Gov. Phil Murphy on Tuesday unveiled a proposed $48.9 billion state budget that lifts spending in New Jersey to a new high while vowing to make the state more affordable.

“This budget is rooted in a renewed commitment to moving our state forward, creating opportunity for every family, and making our state more affordable,” Murphy told state lawmakers Tuesday afternoon as he detailed the fiscal year 2023 spending plan during his sixth budget address — his first speech at the Statehouse in Trenton since the coronavirus pandemic began in 2020.

The state raked in record tax revenues over the past two years, which have contributed to a $4.6 billion surplus in the current budget. That left Murphy with a question few New Jersey governors face: How do we spend all this money?

The answer to that question might have been different six months ago, before a heated November election catapulted the issue of taxes and affordability to the top of the agenda in Trenton.

Since then, the ambitious progressive goals of Murphy’s first term have given way to a renewed push on cutting taxes and making New Jersey more affordable.

“For whom are we making New Jersey more affordable?” the Democratic governor asked Tuesday. “To me, and in this budget, the answer is clear. It’s everyone looking for their opportunity.”

It’s now up to Murphy and the Democratic-controlled state Legislature to negotiate a final budget over the next four months. The governor must sign it into law by June 30. The plan will next be subject to a series of public hearings.

TAX REBATES, FEE ‘HOLIDAY’

Murphy is attacking the high cost of living in New Jersey primarily through tax rebates and massive amounts of state spending. The governor’s spending plan is an increase of $2.5 billion over the current state budget.

The new property tax relief program announced last week would use $900 million to replace the Homestead Benefit and extend property tax relief to about 1.8 million New Jersey households.

Under the new program, New Jersey homeowners making up to $250,000 would be eligible to receive an average $700 rebate in the first year, and renters making up to $100,000 would be eligible for a rebate up to $250 to help offset the cost of rent increases due to property taxes.

Murphy also proposed cutting a wide range of fees by a combined $60 million under a one-year fee holiday. This would allow New Jersey residents to get into state parks for free beginning July 1. He also wants to waive fees for drivers license renewals, marriage licenses, and licenses for certain health care professionals.

The Democratic governor plans to use $305 million in federal money from the American Rescue Plan funds to create a fund for affordable housing in New Jersey.

The Affordable Housing Production Fund would help complete all affordable housing projects identified in Mount Laurel settlements and create over 3,300 new units, officials said.

That would be in addition to the $1 billion in ARP funds already approved for use in the Eviction Prevention Program and Homeowner Assistance Fund. Those funds will start being distributed this year: $500 million to provide up to two years of rental assistance for over 25,000 households and $250 million to provide utility assistance for around 140,000 households.

Murphy also wants to bolster the Down Payment Assistance program to help low- and moderate-income residents wishing to buy homes with $5 million in additional funding, bringing the total state investment to $25 million. Administration officials said it has helped 2,134 low- and moderate-income homebuyers over the past year.

PUBLIC WORKER PENSIONS

Murphy has proposed a $6.82 billion contribution to the New Jersey pension fund, which supports the retirement of about 800,000 active and retired state and local government workers.

If approved, it would mark the first time in more than 25 years the state will have made a full pension contribution two years in a row.

New Jersey’s pension fund has long been among the worst-funded in the nation. In the second half of last year, it was hit especially hard by underperforming stocks in emerging markets.

The state has for decades skipped or shorted payments to the pension system, piling on unfunded liabilities.

Prior to last year’s full payment of $6.4 billion, Murphy had been increasing contributions each year by one-tenth of what’s recommended by actuaries.

SCHOOL FUNDING

The budget proposal notably calls for raising direct aid to public schools to $11.6 billion, an increase of $662 million or 6% from last year. That includes an additional $68 million to expand public pre-K.

The governor proposes increasing higher education funding to $2.9 billion towards direct support to colleges and universities and financial aid for students.

His plan includes raising the income threshold for the state’s tuition free community college program to $80,000, extending those benefits to over 7,000 more students.

Murphy also proposes a new $3 million one-time fund that would encourage New Jerseyans who didn’t finish their college degree to return to campus and complete their remaining credits.

ECONOMY AND INFRASTRUCTURE

Murphy reiterated his commitment to not increase fares on NJ Transit, which is projected to spend $2.76 billion in the coming fiscal year, a 7% increase from the current budget.

Transit’s operating budget would incorporate $721 million from an agreement inked last year with the Turnpike Authority, which is supposed to provide a dedicated funding stream for NJ Transit.

The administration wants to pay for critical transportation projects by using the more than $700 million left in the $3.7 billion debt defeasance fund created last year. The projects would include bridge construction and improvements to stations, including the modernization of Newark Penn Station and the Walter Rand Transportation Center Improvement Project.

HEALTH AND SAFETY

The administration’s spending on healthcare includes nearly $20 million in state and federal funds to implement the Statewide Universal Newborn Home Nurse Visitation program, and $15 million to raise Medicaid rates for maternity care providers.

Murphy said he also plans to work with the Legislature on developing student mental health and success initiatives with federal ARP funds.

The governor also proposes using $53 million in ARP assistance to create a one-time fund for taxpayers without a Social Security number who did not receive federal stimulus aid.

‘GETTING BACK TO NORMAL’

The event felt celebratory after two years of a deadly pandemic that has upended countless aspects of life. It was Murphy’s first speech in front of the Legislature inside the Statehouse since his 2020 budget address, delivered just weeks before the state went into lockdown mode over COVID-19.

The speech came a day after Murphy lifted the state’s public health emergency and statewide school mask mandate as coronavirus numbers continue to improve.

Face coverings were required for the address, though many in the crowd went maskless. Social distancing was absent, with people sitting shoulder to shoulder.

Murphy raised both his arms as he took the lectern to applause.

”It is good to be back in this chamber, and with all of you,” the governor said at the start of his speech. “It has been, without any doubt, a long and hard two years. ... New Jersey is getting back to normal.”

DEMOCRATIC APPLAUSE, REPUBLICAN SILENCE

Murphy’s fellow Democrats rose repeatedly to give the governor standing ovations at many points during the speech.

Republicans, meanwhile, sat largely silent — except at two points. The first was when Murphy recognized International Women’s Day and when he acknowledged his wife, First Lady Tammy Murphy.

The speech comes a few months after a contentious November election in which Murphy won a second term by a closer-than-expected margin and Democrats kept control of the Legislature, though Republicans gained seven seats — their best showing in three decades.

Murphy and Democrats have repeatedly said since then New Jersey’s leaders need to listen more closely to its residents and make the state more affordable.

But Republican lawmakers weren’t happy Tuesday. With the mountain of cash New Jersey has amassed, they said, Murphy should deliver tax relief faster and pay down debt. Instead, they contend, his budget represents many “missed opportunities.”

“Everyone now is talking about affordability. That’s great. Republicans have been taking about it for years,” said state Senate Minority Leader Steve Oroho, R-Sussex. “We want to give back the money, right now — immediately, so it can’t be pick-pocketed again. We are hoping the Democrats will listen to us.”

Sen. Declan O’Scanlon, who serves as budget officer for Senate Republicans, said the state should focus on spending that’s sustainable.

“It’s wonderful we are flush with cash, but the real question is what are we going to do with it? How can we make it sustainable,” said O’Scanlon, R-Monmouth. “I would argue the Republican plan and the Republican projections are much closer to reality.”

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published this page in News and Politics 2022-03-09 03:02:40 -0800