Murphy enacts $ 46.4 billion budget
Gov. Phil Murphy enacted the Democrats’ $ 46.4 billion budget bill a day before the deadline Monday, capping an election year appropriations process that lacked Democratic internal struggles that defined budget negotiations during the first two years of his tenure.
“New Jersey now stands ahead of the dawn of the new looming post-COVID day, and it’s the budget that will make sure that day is better than yesterday,” Murphy said. “There is so much good this budget invests in that talking about it all would put me past the constitutional deadline for tomorrow’s state.”
The hefty bill, fueled by better-than-expected collections and federal aid that left the state with a $ 10 billion surplus at the end of the current fiscal year, includes a $ 6.9 pension payment. billion dollars and a debt fund of 3.7 billion dollars to be repaid. existing bonds and prevent future borrowing.
Murphy initially proposed a pension payment of $ 6.4 billion, but lawmakers agreed to increase it by $ 505 million after the income hike. The governor said the larger payment would save the state more than $ 1 billion in future pension obligations.
“The pension system, if we hadn’t started funding it, would have gone bankrupt,” said Senate Speaker Steve Sweeney (D-West Deptford). “Now we are moving in the right direction, and this is an investment. It’s not pork. It is an investment in people. We are fixing higher education. We speak up instead of looting school after school.
Democrats have avoided tax hikes in the new budget bill, although they have done little to lead an unemployment tax hike that goes into effect next month. These collections are intended to replenish the Unemployment Insurance Fund, which has seen its coffers emptied by the record demands recorded during the pandemic.
But the bill included tax breaks that could win the hearts of voters ahead of the November election. The state will spend $ 319 million on a tax rebate program that will allow New Jersey residents with dependents to receive checks worth up to $ 500, though most rewards won’t. are not as high.
They also updated the Homestead Benefit Program, which offers tax cuts to New Jersey homeowners. This program has been updated to calculate refunds using 2017 property tax bills instead of 2006 15-year bills.
The debt relief fund includes $ 2.5 billion to repay existing debt. Democratic staff said they identified $ 3.2 billion in debt that could be prepaid. The remaining $ 1.2 billion in the fund is to be used for capital investments. Democrats pushed it as part of a larger deleveraging plan, arguing it can be used to prevent future borrowing.
The windfall also left the state with significantly more reserves than anticipated earlier in the year. Murphy’s budget proposal called for the state’s rainy day fund balance to be reduced to zero. Instead, he will have a balance of $ 1.3 billion. Another amount of approximately $ 500 million is deposited in the unallocated surplus.
But the absence of internal struggles does not mean that the process was without drama.
Democrats have been widely criticized for an incredibly opaque budget process. The full text of the budget bill became public minutes before the budget committees of both chambers advanced the 280-page measure.
Budget resolutions indicating which lawmakers requested the so-called “Christmas tree” articles were not released until the vote, in contradiction with the intention of a 2007 reform aimed at avoiding corruption that required these articles. resolutions are made public 14 days before the final budget vote.
The Senate published a list of budget items that includes a single sponsor for each position, but this document does not show that lawmakers confirm that their budget resolutions do not represent conflicts of interest. The resolutions themselves have not yet been published.
The list of favorite projects is long and totals more than a hundred million. Senate Republicans called on Murphy to release all budget resolutions he had in his possession Tuesday morning.
They include, among other things, $ 3 million for the repair and redevelopment of the camp in Irvington, $ 10 million for the acquisition of properties by the North Bergen school district and $ 15 million for the Camden County Improvement Authority for demolish vacant properties.
The Assembly has yet to release these documents, although Assembly Speaker Craig Coughlin (D-Woodbridge) and Assembly Budget Committee Chair Eliana Pintor Marin (D-Newark) have said they would make them accessible to the public in the coming weeks.
Unsurprisingly, Republicans opposed the Democrats’ budget, saying Murphy and the legislative leaders should have used the $ 10 billion surplus to send money back to taxpayers and avoid the increase in tax on the government. unemployment.
Democrats are saving some of that money, which includes about $ 4 billion in better-than-expected fundraising and more than $ 6 billion in federal funds made available as part of the stimulus bill that President Joe Biden enacted. in March.
But some of that money is being used, and much of it goes to lawmakers’ favorite projects.
There is $ 200 million for an additional year of special education for the next three years. Special education is an issue close to Sweeney’s heart. The daughter of the President of the Senate is a young woman with an intellectual disability.
Millions more go to a series of programs aimed at reducing food insecurity, a key issue for Coughlin.
“When I look at the budget, I don’t really see a lot of positions. I see life changing impacts of investing in communities and in their future, ”said the speaker. “We put money back in people’s pockets.
An additional $ 750 million in federal funds will end the moratorium on state evictions. Most of that money, $ 500 million, will be used for rent assistance, while the remaining $ 250 million will help residents pay their utility bills.
But while the governor and legislative leaders reversed many of the irresponsible budget practices common in New Jersey for most of the past decade, they again failed to identify a dedicated funding source for NJ Transit. , at one point attracting a rebuke from the Senate Majority Leader. Loretta Weinberg (D-Teaneck).
While this year’s operating capital transfer is about $ 100 million lower than last year, this reduction is largely fueled by federal aid that will evaporate in the years to come. Almost $ 361 million is still being transferred and the clean energy raid continues.