Tax Relief, School Funding Feature In Murphy’s 2024 Budget Address

TRENTON, NJ — Funding New Jersey’s schools, providing relief from the state’s high property tax rate, and keeping the budget balanced as a possible recession looms are among the considerations Gov. Phil Murphy will discuss in his 2024 budget address Tuesday.

Murphy will present his proposed budget for the 2024 fiscal year, which starts in July, at 2 p.m. The Democrat and legislators must agree on the spending plan by July 1 or risk a government shutdown.

The budget address will be live-streamed on YouTube and the governor’s social media, as well as NJ PBS. It’s scheduled to begin at 2 p.m. at the Statehouse in Trenton.

Last year’s $50.6 billion budget was the largest in the state’s history.

Murphy said last Friday that there will be no fare increase on NJ Transit for the sixth year in a row. State Treasurer Elizabeth Maher Muoio also said the budget will include no new taxes, “unprecedented levels” of school aid, and property tax relief for senior citizens and families.

The Garden State pays the nation's highest rate on property taxes by a long shot, with an average bill that's 43 percent higher than the second-leading state, a recent report from WalletHub showed. Tuesday is the deadline to apply for the new $2 billion ANCHOR program, which offers tax relief for homeowners and renters under a certain income threshold. Murphy has not yet said if he will renew or expand the program for next year.

State-budget season is always contentious in Trenton. But this year's process includes the added significance of upcoming elections, with all State Senate and Assembly seats on the ballot in November.

State Republicans unveiled their own plan to fully fund schools, which they also say will lower property taxes around the state, last week. This plan uses the state’s $6.5 billion surplus and requires local governments to lower property taxes dollar for dollar, GOP legislators said. Read more about that proposal here.

Education aid represents a significant portion of New Jersey's tax dollars. The state's $50.6 billion budget for the current year (Fiscal Year 2023) includes $9.9 billion in K-12 aid — $650 million more than the prior fiscal year's.

Since the 2020-21 school year, the state has determined its annual distribution of education aid through S-2 — a controversial funding formula passed in 2018, Murphy's first year in office.

Supporters of S-2 say the formula assists districts that were consistently underfunded through the prior school-aid formula, which passed a decade prior. Critics contend that the current formula has deprived other communities of much-needed educational aid.

And, a corporate surcharge on the biggest earners is set to sunset next January, as Patch reported in the past. The surcharge is a 2.5 percent tax on corporate profits exceeding $1 million, which is paid in addition to the state’s 9 percent overall rate – making the combined rate of 11.5 percent the highest in the nation for 2022. It was rolled out in 2018, the year after Murphy was first elected.

Murphy said that he is open to letting the surcharge expire at the end of the calendar year in an interview with Bloomberg TV earlier this month. A coalition of 28 organizations and labor unions have urged Murphy to keep the surcharge on big companies like Verizon, Johnson & Johnson, Amazon, and Walmart.

Other New Jersey officials and pundits have argued in favor of dropping the state’s corporate tax surcharge, however.

Some Republicans, such as Assemblyman Christopher DePhillips (District 40), have been blasting New Jersey’s “highest-in-the-nation” corporate tax rate, with DePhillips recently pushing for a bill that would lower the rate to an overall 2.5 percent.

“The business community knows that Democrats in Trenton are addicted to taxing and spending,” DePhillips said. “Democrats cemented their bad business reputation when they passed the additional 2.5 percent corporate surcharge in 2018 and then added insult to injury by extending it in 2020.”

Patch’s Josh Bakan and Eric Kiefer contributed to this report.