NJ lawmakers send record $46.4B budget to Murphy’s desk
TRENTON, N.J. (AP) — New Jersey lawmakers Thursday passed a record $46.4 billion budget, 15% higher than last year, loaded with a bigger pension payment, tax givebacks for the public and funds to pay down the state’s debt, among other spending.
The Democrat-led Assembly and Senate passed the budget, with Republicans objecting, sending it to Democratic Gov. Phil Murphy. He indicated he helped negotiate the deal with legislators, but it’s unclear when he’ll sign it. He faces a July 1 deadline.
Democrats praised the plan as a message that the state is recovering strongly from the COVID-19 outbreak.
“This budget represents an important statement to all New Jersey residents: We are primed and ready to rebound from the pandemic,” Senate President Steve Sweeney said.
But Republicans said the new spending was unsustainable in the future.
“That’s insanity spending. That just can’t be sustained,” Republican Assembly member Hal Wirths said. “There’s a lot of good things in here but we have to remember you’re celebrating with other people’s money.”
Unlike previous budget fights, even among Democrats, the fiscal 2022 plan confronted lawmakers and Democratic Gov. Phil Murphy with a $10 billion windfall, the result of better-than-hoped-for sales tax collections as residents’ bank accounts swelled because of COVID-19 stimulus checks. While stimulus checks weren’t taxed, income tax collections were also up.
The state is also flush with more than $6 billion in cash from the federal American Rescue Plan. Of that, $500 million would go to help tenants facing eviction, $250 million will go toward utility relief, $180 million for ventilation in schools and $100 million for expanded childcare. The budget also uses federal funds to provide $600 million over three years to give an additional year of special education for 22-year-olds with disabilities.
The budget calls for a $6.9 billion pension payment, up about 44% over last year. Legislators upped the amount from the governor’s request of $6.4 billion earlier this year because of the positive tax collections.
It’s the first time since 1996 the state will make a full pension payment — the amount actuaries have determined the state must pay to meet its share. Despite the full payment, New Jersey will carry an unfunded liability of about $51 billion.
The budget has almost $500 million in tax givebacks for residents, though the biggest chunk is a one-time benefit: checks of up to $500 for families making up to $150,000 or up to $75,000 for those filing individually. Filers must have at least one dependent child. The rebate will go to an estimated 760,000 families. It costs $319 million.
The budget also will update how the state calculates a property tax rebate for older and disabled residents, changing the basis for the benefit calculation from 2006 to 2017. That will increase the average benefit for seniors and the disabled by about $130, according to lawmakers.
The spending plan lays aside nearly $4 billion to help pay down debt, with $2.5 billion for lowering debt payments and $1.2 billion for capital projects so officials can avoid any new borrowing.
There are no new taxes or fees, lawmakers promised.
Aside from concerns about sustainable funding, Republicans decried the plan for failing to spend more to update outdated computer systems at the state’s Motor Vehicle Commission and Labor Department.
New Jersey has a constitutional requirement for a balanced budget by July 1.
Murphy has said he was working with lawmakers on the spending plan and is expected to sign it, if it reaches his desk.