8 Points In Gov. Murphy's 2021 NJ Budget Address That Affect You

NEW JERSEY — Gov. Phil Murphy delivered a 2020 budget address that may have surprised people, proposing a big burst of funding to schools but no new fees or tax hikes

But his address covered a lot of areas – additional school aid, COVID relief, business and pension funding, boosting health care and improving NJ Transit – that millions of New Jerseyans may find interesting, if not appealing ... or even detestable (see list of eight points below).

On Tuesday, Murphy introduced a state budget that has no new taxes or fees but still finances plenty of initiatives. And for the first time in 25 years, the state will make a full contribution to the state’s pension system, while at the same time providing the highest level of school funding in state history and providing financial relief for families and businesses that are struggling amid the coronavirus pandemic.

There is also money set aside for coronavirus recovery, clean energy initiatives, and criminal justice reform.

Democratic lawmakers applauded the additional school funding.

"I applaud the administration fulfilling the commitment of S-2 and recognizing the detrimental impact last year's flat funding had on our districts. With this year's budget, we are back on track to fully funding our public schools by FY2025," said Sen. Teresa Ruiz. "The governor's continued investment in early childhood education is extremely encouraging, as it has been a cornerstone of my legislative agenda for a long time.

"We know that universal access to pre-K is one of the greatest equalizers at our disposal and we are one step closer to providing that for all of New Jersey's children. In the months ahead, it is crucial we are doing everything we can to provide students a safe return to their classrooms so that we can begin to address the learning loss which has been compounded over the last year."

Republicans, however, said that even though there are no new taxes in this year’s budget, residents should be concerned about the spending.

State Sen. Christopher Connors, Assemblyman Brian Rumpf and Assemblywoman DiAnne Gove (R-Atlantic/Burlington/Ocean) said money Murphy borrowed last year will pay for what’s in this year’s budget, then raise taxes when that money runs out.

They said the legislature should send the proposed budget “back to the drawing board.”

“The numbers don’t lie. Spending has increased more than 30 percent since Governor’s Murphy’s first year, to the surprise of few. His most recent proposed State Budget is chock full of spending for new programs or increases for existing ones,” the legislators said in a joint statement.

Others also complained that nearly 200 school districts will get a cut in school aid, which could impact local property taxes. Another 300-plus would get more money. Read more: 2021 NJ School Aid: Who's Getting More; Who's Getting Less

Senator Steve Oroho, Assemblyman Parker Space and Assemblyman Hal Wirths criticized the proposed budget for "strangling school districts" with inadequate education funding even while proposing record-high spending in his overall budget.

“Even this year, with the most bloated state budget in our state’s history, the governor’s funding plan still gives our local school districts short shrift,” said Oroho. “Our schools once again will be crippled by deficient state aid, and property taxpayers in our district will be burdened with higher rates to fill the void."

Here’s a list of what New Jersey taxpayers will likely get for over the next year:

Hospital Funding Amid the COVID Crisis

A total of $269 million — plus a one year $10 million boost to assist with pandemic-related costs — is recommended to be distributed through the Charity Care program to all hospitals in New Jersey, while focusing the majority of resources on those safety-net facilities that provide the greatest volume of care to the uninsured relative to their total patient group.

New Jersey is also tackling the health care aspect of the pandemic, including an additional $25 million in NJ Health Plan Savings subsidies.

Making the Full Pension Payment

The proposed budget includes an additional $1.6 billion for the state’s pension system, or 100 percent of the minimum Actuarially Determined Contribution.

This is the first time the state has made its full contribution since 1996. Murphy made this commitment and delivered on it a year early.

Highest Amount of School Aid in New Jersey History

New Jersey will also see the highest amount of school aid in history, with $18.1 billion in funding for pre-K to 12 education, an increase of $1.740 billion over the previous year. This includes:

• $624 million more on direct pre-K through 12 education aid than last year;
• Investing $25 million more into Extraordinary Special Education Aid; and
• Creating a $50 million Stabilization Aid program.

Higher Education

A series of initiatives are aimed at making college more affordable:

• The budget sets aside $50 million to guarantee free tuition for two years at four-year institutions. This would be for students with household incomes of less than $65,000;
• Another $27 million is earmarked for the Community College Opportunity Grant (CCOG) program, which provides tuition-free community college for eligible students;
• Community colleges will also get another $5 million in aid; and
• Funding for the Educational Opportunity Fund (EOF) will increase by $2.8 million for a total of $51.8 million, which will cover the identifiable undergraduate student capacity needs for the academic year for the first time.

Reviving Small Businesses

Much of the budget is aimed at helping the state recover from the coronavirus pandemic.

This includes $100 million over two years for the Main Street Recovery Finance Program, and a nearly $100 million economic development package that boosts grant programs in multiple departments and launches the Economic Development Authority’s Black and Latinx Seed Fund to increase access to capital in underserved minority communities.

It's part of a new multi-departmental economic growth initiative that also includes:

• $25 million for EDA’s lending programs such as Premier Lender and Microbusinesses;
• $20 million for the NJRA’s Urban Site Acquisition Fund and Redevelopment Investment Fund, the first state investment in the NJRA since 2002;
• $15 million for Permit Modernization across state departments and for local governments;
• $13.5 million for the Department of Transportation’s Local Aid and Economic Development Grants, including the Transit Village, Safe Streets to Transit, and Bikeways programs;
• $10 million for EDA’s Black and Latinx Seed Fund initiative;
• $6.5 million for DCA’s Neighborhood Preservation Program and Main Street New Jersey, allowing each to expand to significantly more communities;
• $5 million for the Department of State’s Business Marketing Initiative;
• $3.2 million for the Commission on Science, Innovation and Technology;
• $1 million for EDA’s NJ Ignite; and
• $500,000 to double funding for EDA’s Small Businesses Bonding Readiness Assistance program

Tax Relief

Following last year’s enactment of the millionaire’s tax, $319 million in direct tax relief is available for middle-class families. This includes:

• No new taxes or fees;
• A $500 rebate will go to over 760,000 couples and individuals with qualified dependents;
• $1.25 billion in funding to support various property tax relief programs;
• Expand the Veterans’ Property Tax Deduction to those who served in peacetime;
• Make the Child and Dependent Care Credit refundable and expand eligibility to families making up to $150,000; and
• Expand eligibility for the Earned Income Tax Credit to roughly 70,000 senior citizens without dependents.

Criminal Justice Reform

More than $16 million is being allocated for criminal justice reform, including:

• $5 million for education, employment, and legal materials for inmates;
• $4.2 million more for county Youth Services Commissions to reduce juvenile delinquency;
• $3 million to help fund non-profits that facilitate re-entry;
• $2.25 million for the Scholarship and Transformative Education in Prison Program; and
• At least $2 million in support for a new career training program at JJC and an apprenticeship program and other career services for inmates.

NJ Transit

The FY2022 budget proposal also increases total resources for NJ TRANSIT to $2.65 billion, 9 percent over FY2021 and 15 percent over FY2019.

It also continues to reduce diversions from the agency’s capital fund for operating costs, marking the lowest transfer in 15 years.

And for the fourth consecutive year, there will be no fare hike.

"We got to work restoring NJ Transit to make it function better for commuters and to make it a point of pride for attracting, growing, and keeping new jobs and industries," Murphy said. "And we put shovels in the ground to modernize the drinking water infrastructure we will need to make our communities safer, especially for our kids. Because of sizeable support from the federal government, these investments are all protected and maintained."

Other things to know about the budget:

• Clean Energy: Murphy is proposing significant direct appropriation investments, including $200 million for the Offshore Wind Port and $60 million to support the continuation of the Drinking Water and Clean Water Infrastructure Fund.
• PT BAIT: Under the Pass-Through Business Alternative Income Tax, business owners can be taxed as an entity rather than as an individual. Its revenue neutral, but because of the timing of its passage in January 2020, the state will see an extra $619 in its budget for this year only.
• Immigration: $8.2 million is set aside for funding for legal representation for anyone facing detention or deportation based on immigration status. It is up from $6.2 million set aside in the last budget as part of the Office of New Americans.
• Reproductive Health Care: The Reproductive Health Care Fund will see an additional $19 million to help cover the costs of contraceptive, prenatal, labor, and delivery care for those without access to medical assistance.
• Family Planning Services: An additional $19.5 million for family planning services brings the four-year total under the Murphy Administration to $74 million.