Gov. Murphy Signs NJ 2022 Budget—With $500 Rebate Checks

NEW JERSEY - Gov. Phil Murphy signed off on the state’s budget for next year Tuesday morning, with a provision slated to shell out rebate checks to eligible residents as early as this week.

Signed at the Ross Street School No. 11 in Woodbridge, the Fiscal Year 2022 Appropriations Act was signed by Murphy - joined by Senate President Sweeney, Speaker Coughlin, Lieutenant Governor Oliver, State Treasurer Muoio, Senate Budget Chair Sarlo, Assembly Budget Chair Pintor Marin and Woodbridge Mayor John McCorma - cementing the state’s budget for the upcoming fiscal year.

“This year’s budget represents the culmination of a four-year journey to fix many longstanding problems in New Jersey,” Murphy said. “This is a budget that invests in our middle-class and working families – supporting both those building their families and careers and those who are living out their richly-deserved retirements. It also puts a world-class education within reach for all while tackling our age-old property tax problem – ensuring a stronger, fairer, and healthier future for the generation born and reared in the shadow of an unprecedented pandemic.”

Included in the budget is an increase of formula aid by nearly $750 million and “billions of dollars worth of tax relief,” the governor said, including a “Middle Class Tax Rebate” available to eligible parents. The rebate check program comes as part of a $319 million package that Gov. Phil Murphy and lawmakers agreed to in September, with about 800,000 New Jersey residents eligible to receive a $500 rebate check starting this week.

The budget is also slated to ensure children’s healthcare in the state and increase the threshold for families to qualify for and receive a credit against their income taxes for the cost of childcare or elder care.

“If there is anything that sets our values apart, it is this: the prior administration … believed that the only way to prosperity was by cutting taxes for the wealthiest, which meant leaving everyone else behind,” Murphy said. “We are not going back to that. We know that New Jersey can only succeed when prosperity radiates from a strong middle class and from the hard work of those yearning to join the middle class.”

This is a developing story. Patch will have more information as it comes in.

The check is available to married parents filing a joint tax return or who identify as head of household or as a surviving spouse. The parents must have at least one child and earn a maximum of $150,000. The rebate threshold is $75,000 for single parents or each parent who files separate returns. The parent must have a gross income tax liability greater than zero.

“We are making it so that more residents can invest tax-free in their child and grandchildren’s higher education future by exempting more of what they put away into a state-sponsored 529 savings account. This will help countless students afford a college education and lower the burden of, and the need for, student loans,” Murphy said.

But not everyone is pleased by this new budget plan, which was passed via party lines.

Senate Republican Budget Officer Steven Oroho (R-24), Senator Declan O’Scanlon (R-13), Senator Michael Testa (R-1), and Senator Sam Thompson (R-12) sent a letter to Governor Murphy calling for the immediate release of budget resolutions and other materials that might explain the purpose for hundreds of millions of dollars of so-called pork spending that was added by Democratic legislators to the budget immediately before it was voted on and approved by the Legislature in party line votes last week.

"The public has a right to know how their money is being spent," the letter said.

"Alternatively, if their governor approves hundreds of millions of dollars of what appears to be pork without knowing what it is and without a basis for why it is worthy of their tax dollars, they have a right to know that too."

The budget will also see a raised limit on which retirement income becomes taxable, as well as a lowered age limit on earned income tax credit.

In terms of education, the budget also invests an additional $50 million in pre-K, including $26 million for new programs, and provides an additional $125 million for Extraordinary Special Education Aid.

‘“We are continuing our promise to move toward full and equitable funding of our public school funding formula with an additional $580 million,” Murphy said.

“Every dollar that the state puts in in aid is a dollar that does not have to come locally, paid for by local property tax payers,” Murphy said.

Other tax relief components of the Fiscal Year 2022 Budget include, but are not limited to:

• Updating the Homestead Benefit Base Year to 2017: The Fiscal Year 2022 Appropriations Act will update Homestead Benefit payments so that they are based on 2017 property tax information, which is the most recent payment information available, instead of 2006 records. This change is estimated to increase the average benefit for seniors and disabled homeowners by over $130 and the average benefit for lower-income homeowners by $145. The estimated program cost is nearly $80 million.

• Child and Dependent Care Credit (CDCC) Expansion: This budget proposes expanding the CDCC that the Governor and Legislature enacted in 2018 so that it is both available for families making up to $150,000 and refundable. This change will benefit over 80,000 more families, and increase the average credit for those making under $30,000 to $277. The estimated cost is $17 million.

• Extending the Veterans Property Tax Deduction to Peacetime Veterans: The Appropriations Act will support the expanded deduction approved through the 2020 ballot measure. The estimated foregone revenue cost is $15 million.

• Expanding the Earned Income Tax Credit (EITC) Age of Eligibility of 21 to 18 and to Those Over Age 65: The Governor and the Legislature have provided meaningful middle-class tax relief by boosting the EITC from 35 percent to 40 percent since 2018. Last year, the Governor led on expanding eligibility to an additional 60,000 New Jersey residents by lowering the minimum age from 25 to 21. In Fiscal Year 2022, Governor Murphy and the Legislature will expand eligibility to those 65 and older without dependents and to those as young as 18, which is projected to help another 90,000 residents – roughly 70,000 over 65; and 20,000 between the ages of 18 and 21. The estimated foregone revenue cost is $13 million.

With reporting by Russ Crespolini.