$49B Budget Battle In NJ As Deadline Looms

TRENTON, NJ — The season of working out New Jersey's annual state budget usually features discussions and deals behind closed doors. But with the deadline looming for finalizing the Fiscal Year 2023 budget, the results of those conversations could become clear soon.

Gov. Phil Murphy introduced a $48.9 billion budget proposal March 8 — about $2.5 billion more than this year's. With the new fiscal year beginning Friday, the administration and lawmakers have a few days to reach an agreement and avoid the threat of a state-government shutdown. Read more: Gov. Murphy's $49B NJ Budget Focuses On Property Taxes, Relief

Lawmakers hope to introduce a final budget proposal Monday or Tuesday, vote on it by Thursday and get it signed into law by Friday, legislative sources told NJ Advance Media. The State Senate's Budget and Appropriations Committee has a packed schedule Monday, with more than 60 bills on the agenda for its 1 p.m. meeting.

At the same time, leaders may make deals on bills regarding gun laws, auto insurance and other initiatives not directly linked to the state budget that needs passage.

Few agreements have been publicly announced. But Murphy and Democratic leaders have announced intentions to expand the proposed Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) Tax Relief Program. The program, which would replace the Homestead Rebate, would provide an average benefit of $628 to more than 2 million homeowners and renters for a total of about $2 billion in relief. Read more: This Is How Much Property Tax Relief You'll See In New NJ Program

Murphy, Senate President Nicholas Scutari and Assembly Speaker Craig Coughlin also announced a sales-tax holiday on back-to-school supplies from Aug. 27 to Sept. 5. Read more: NJ Sales Tax Holiday Coming For Limited Run

The fiscal estimate for the tax holiday is $75 million, according to the Murphy administration, which makes it a minor component in the face of agreeing on a state budget worth around $50 billion. But Murphy touted the tax holiday as a step toward making New Jersey living less expensive. Read more: NJ Sales Tax Holiday Coming For Limited Run

"Today we take another monumental step forward on my Administration’s commitment to make New Jersey a stronger, fairer, and more affordable state for our residents," Murphy said Thursday. "A back-to-school tax holiday has been talked about for a long time, and as inflation is a central worry around many of our residents’ kitchen tables, now is the time to do it."

Legislative Republicans have criticized the measures as gimmicks that don't meet the moment amid inflation further exacerbating New Jersey's high property taxes and cost of living.

"Injecting steroids into Murphy's recycled rebate program won't get anyone more excited about it than when Murphy announced it in February," Assembly Republican Leader John DiMaio said of the proposed ANCHOR Program expansion. "It doesn't deliver meaningful changes in fiscal policy and will be the first program to get cut when money is tight."