$54B New Jersey State Budget Gets Mixed Reaction (See The Highlights)

NEW JERSEY — New Jersey’s latest state budget recently got a green light, with some pundits saying it is “fiscally responsible” – but with others offering heavy criticism.

Gov. Phil Murphy signed the $54.3 billion spending plan into law late Friday, after it passed votes in the Senate and Assembly. According to the governor’s office, the budget “has no new taxes or fees.”

Other highlights from the governor’s office include:

• Includes more than $2 billion in direct property tax relief for the second year of the ANCHOR Property Tax Relief Program
• Doubles the Child Tax Credit, enabling families with young children to receive up to $1,000 per child under age six for families earning under $30,000
• Begins to phase-in the newly enacted StayNJ property tax relief program for seniors
• Adds $832 million in K-12 formula aid compared to the prior year. Includes an additional $116 million for pre-school education aid, including $40 million toward expanding pre-K programs in new districts.
• Includes a record $7.1 billion pension payment for Fiscal Year 2024, which includes contributions from the State lottery
• Results in a “historic surplus” of more than $8 billion

The latest state budget also follows through on the sunset of New Jersey’s corporate business tax surcharge, which has inspired passionate arguments in its favor – and against it.

New Jersey’s 2.5 percent surcharge tax for businesses with more than $1 million in revenue rolled out in 2018, the year after Murphy was first elected. The surcharge was originally scheduled for step downs in 2020 and 2021, but it was extended by the state Legislature. It will automatically expire on Jan. 1, 2024, unless it’s extended by new legislation or specific language in this year’s budget. Read More: Bitter Struggle Over New Jersey Corporate Business Tax Heats Up

The governor released a glowing evaluation of this year’s budget. He wrote:

“Over the last two years we have committed over $6 billion in direct property tax relief, tackling one of the single greatest and longest standing affordability challenges our state faces. This budget will also lower prescription-drug costs for seniors, help hardworking families by expanding free pre-K for kids, create good-paying jobs and fight climate change by building a green economy, expand mental health services for our kids, build and preserve affordable housing so everyone has a place they can call home, help first-generation homebuyers achieve the safety and security of owning a home, and so much more. We are accomplishing all of this in a fiscally responsible way.”

Reaction to the budget from other sources was mixed, however. One big complaint was an alleged lack of transparency in this year’s budgeting process.

“It is incredible to me that despite the state being flush with cash that we are doing a last-minute vote to pass a $54 billion dollar budget that is due no later than [Friday],” Sen. Joe Pennacchio said (R-26).

“There is no transparency and the budget numbers provided in the budget committee were inaccurate,” Pennacchio said. “Legislators cannot do the job they were elected to do when the process is rushed and opaque. Why was this budget not completed and voted on weeks ago?”

But other key lawmakers involved in the process has praise for this year’s spending plan – and the governor.

“This is a responsive and responsible budget that meets the economic challenges of our time,” said Senate Budget Committee Chairman Paul Sarlo. “It will provide significant tax relief, install economic safeguards and help fuel economic growth.”

“This budget highlights the priorities of a New Jersey that values its residents, promotes inclusivity, and invests in our future,” agreed Assembly Budget Committee Chairwoman Eliana Pintor Marin.

“Together, we are ensuring that hardworking families receive the retirement security they deserve, access to safe and affordable homes, relief from property taxes, and quality education that empowers our children to thrive,” Pintor Marin added.

Catch up with some other recent cheers and jeers for this year’s state budget below.

New Jersey Republican Party (NJGOP) – “Democrats aren’t just spending too much of your money; they are completely incompetent in governing our state. Is it any wonder that New York ate our lunch on congestion pricing when the inept Democrats couldn’t even make their own budget add up at the eleventh hour? No wonder they are resorting to election year gimmicks like a ‘tax cut’ for seniors that will take three years to see the light of day.”

State Treasurer Elizabeth Maher Muoio – “The budget signed by the governor today continues our commitment to making the state a more affordable place to live, work, raise a family, and retire. With unprecedented tax relief for our seniors and middle-class families, a third full pension payment in as many years, record funding of our best-in-the-nation schools and a budget surplus of approximately 15 percent, this budget maintains sound fiscal management that helps prepare for the Next New Jersey.”

New Jersey Policy Perspective (Nicole Rodriguez, President) – “It’s hard to evaluate this budget when it’s riddled with errors and needs to be corrected. What we do know is that an overall lack of transparency rewarded big corporations and special interests at the expense of everyday New Jerseyans. With record revenues and a chance to make generational investments in the state, lawmakers prioritized a $1 billion corporate tax cut and hundreds of millions of dollars to Hollywood studios and real estate developers. Make no mistake, there are great investments in the budget worth celebrating, but they pale in size and scope to the tax cuts and credits given to the wealthy and well-connected. When corporations and wealthy households are allowed to skirt the tax system and do not pay what they owe, that leaves less funding for our schools, mass transit, and other public goods we all rely on. These short-sighted tax cuts threaten the future of New Jersey, especially as federal aid expires.”

Planned Parenthood Action Fund Of New Jersey – With the signing of the SFY2024 budget today, New Jersey continues to be a national leader in protecting and expanding access to reproductive health care … Building on the investments in family planning services in last year’s budget, the SFY2024 budget includes funding that increases Medicaid reimbursement rates for reproductive health care services via a $10 million budget line item. Increasing Medicaid rates for reproductive health services expands access for the approximately 2 million New Jerseyans in the program, ensures the long-term sustainability of reproductive health care providers, and will foster a great return on investment for the state as family planning dollars in Medicaid are subject to a 9-to-1 federal match. Additionally, the SFY2024 budget continues investments first introduced in last year’s budget, including increased funding for family planning services as well as grants that support abortion provider training along with facility and security upgrades.”

Elizabeth Roque (Make the Road NJ member) – “The legislature has given a billion dollar handout to the wealthiest multi-national corporations like Amazon while working families across New Jersey continue to suffer. The failure to extend the Corporate Business Tax Surcharge is a mistake that will have long-lasting, devastating consequences on families like mine who are struggling to make ends meet. A billion dollars would fix NJ Transit, provide a full Child Tax Credit to all kids in New Jersey and help build more affordable housing. But instead, the legislature today has chosen to line the wealthiest corporation's pockets.”

New Jersey Education Association – “NJEA’s officers commended legislative leaders and Gov. Murphy for a budget that increases school funding, provides another full pension payment and gives much-needed additional aid to New Jersey’s county colleges. Additionally, it provides funding for an Office of Community Schools, which will benefit students and communities across New Jersey. It also provides funding for work climate innovation grants for public schools and stipends for student teachers.”

Antoinette Miles, Interim State Director, New Jersey Working Families Party – “For months, advocates have urged lawmakers not to dole out billions of dollars in costly corporate tax handouts to companies like Amazon and Walmart. Trickle-down policies don't work. They limit our ability to make investments that make New Jersey’s economy work for everyone and do nothing to ensure our state can maintain its fiscal footing.”

New Jersey Business & Industry Association President and CEO Michele Siekerka – “The NJBIA is grateful for Governor Murphy’s leadership and fortitude in ensuring that this year’s budget did not extend the temporary CBT surtax. Throughout the budget process, the governor has been correct in saying ‘a deal is a deal,’ and predictability matters for business decision making. He has rightly anticipated the economic benefits that occur for both employers and employees with a declining CBT. As New Jersey goes from the highest CBT in the nation to the fourth highest, we should now begin the discussion about a longer-term strategy to achieve even more balance, particularly with Pennsylvania on its way to a 4.99% rate … Our largest employers certainly deserve better than to be demonized daily for the apparent crime of earning profits against the fiscal headwinds often found in New Jersey. Rather, they should be appreciated for what they provide to our economy, our workers, our communities, and our nonprofits … We also appreciate the fiscally responsible moves in the FY24 budget, including a third consecutive full payment of more than $7 billion to our underfunded pension systems, another year of increased school aid and a healthy surplus. The decision to restore $150 million in energy tax receipts to municipalities will also help hold down local property taxes for all property taxpayers, including businesses.”

New Jersey Future Executive Director Peter Kasabach – “This year’s budget has woefully underfunded our water infrastructure needs, and kicks the can down the road on these obligations, ultimately placing the burden of updating our aging water infrastructure on the shoulders of regular ratepayers and community members. Federal stimulus and recovery funds have presented NJ with a historic, once in a generation opportunity to make meaningful improvements. It’s up to the State of New Jersey to match that commitment and do its part to remove lead service lines, improve stormwater management, and assist our combined sewer overflow communities in fixing their outdated polluting systems. We are deeply disappointed in our government’s failure to rise to this challenge and prioritize water investment in the Fiscal Year 2024 State Budget.”

Marcia Marley, President, BlueWaveNJ – “New Jersey’s economy is growing in part because of responsible stewardship from our Governor and the Legislature. That said, we are in danger of repeating our mistakes by creating a budget plan that will not weather the coming fiscal cliff. Instead the Legislature and Governor are making large tax relief plans which may not be sustainable and fail to target those who need it most.”

Liz Glynn, Director of Organizing, New Jersey Citizen Action – “Allowing the Corporate Business Tax Surcharge to expire benefits a handful of wealthy corporations at the expense of the vast majority of New Jerseyans. This could eventually lead to significant cuts in programs involving healthcare, education, the environment, transportation, and many other initiatives that help ensure working families in our state can thrive and prosper. It also puts future state leaders in the impossible dilemma of pitting our state’s financial health against the economic security of countless New Jersey families.”

New Jersey League of Conservation Voters Senior Policy Director Allison McLeod – “The New Jersey League of Conservation Voters applauds Governor Murphy and the state Legislature in passing a budget that contains critical investments in expanding access to green space in our urban centers. Investments in urban parks, as well as a New Jersey Capitol Park, are an important part of the movement toward environmental justice by ensuring that more New Jerseyans, no matter their ZIP code, race, or income level have access to outdoor recreation opportunities. We would also like to thank Governor Murphy and the Legislature in providing full funding for the Delaware River Basin Commission, which will help the multi-state agency continue its important work protecting the drinking water of millions of New Jersey families, as well as Assemblyman Joe Danielson (D-Somerset) for securing additional resources for towns to take action to address the growing threat of warehouse sprawl. At the same time, we are extremely disappointed in continued raids on clean energy funds. These funds, paid by ratepayers, are an important tool the state has to confront our climate crisis by investing in clean energy projects and ensuring low and moderate income New Jerseyans have access to energy efficiency programs. At a time of record budget surpluses, it is unacceptable that these funds are once again being used to fill budget holes. We must do better as a state, and New Jersey LCV will continue to advocate that clean energy funds be used to support a clean energy transition.”

Philip Hensley, Democracy Policy Analyst, League of Women Voters of New Jersey – “In the middle of the night, the legislature passed a budget giving away billions to big corporations. And the process was as flawed as the budget itself: no public testimony was allowed, legislators voted without seeing the final text, and because of rushed drafting the budget’s numbers don’t even add up. While this budget does invest in some laudable programs, for example by increasing the Child Tax Credit, this budget misses the opportunity to fund New Jersey’s future. This continues a worrying trend in Trenton of passing damaging legislation in the dark. From laws gutting campaign finance limits, to secretive last-minute amendments, to a budget that nobody saw and an assault on OPRA, New Jersey residents are noticing an anti-transparency streak in Trenton. With this budget, an opaque process has once again produced short-sighted and inadequate legislation.”

CWA District 1 Vice-President Dennis Trainor – “After decades of administration after administration of both political parties failing to make the required full pension payment, we’re thrilled that - for the third time in a row - this budget makes the full pension payment. This will help bring retirement security for hundreds of thousands of current and former state workers. And that’s incredible. What’s not so thrilling is Trenton failing to extend the Corporate Business Tax Surcharge – in effect, incredulously rewarding corporate greed and robbing our state of more than $1 billion of revenue annually at a time when New Jersey continues to struggle funding crucial services like education, transportation and healthcare.”

Jewish Federations of New Jersey – “For the first time, this state budget commits $1 million to be allocated specifically for kosher meals within each county’s Meals on Wheels program – a program that provides fresh, daily meals in addition to wellness visits to homebound seniors … In addition to access to healthy meals, the FY ’24 budget increases funding for New Jersey’s Holocaust Survivor Assistance Program (HSAP) in the amount of $650,000. This program provides critical care services to the over 1,000 Holocaust survivors who call New Jersey home.”

Julie Borst, Executive Director, Save Our Schools NJ – “New Jersey schools have been underfunded for over a decade. While the Murphy administration has made great strides in getting us to full funding, we do not see how it will be possible to maintain without the largest corporations paying their fair share of taxes. These same corporations have benefitted from significant federal tax cuts and they have benefitted from New Jersey's well-educated population. They should contribute to support the system that produces those people. Without this funding, homeowners can expect to have to make up the difference.”

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