Gov. Phil Murphy signed the largest state budget in New Jersey history Thursday, a $50.6 billion plan that he says will be transformative in the state — one that will provide tax relief to residents while making investments the governor feels will spur economic development and jump-start new industries, all while reducing the state’s deficit.
The budget, which takes advantage of record revenues in the state, also includes a full pension payment for the second consecutive year. Many feel the long-underfunded pensions are the biggest obstacle to the financial future of the state.
The budget was not universally praised. Business groups were stunned there was so little in the budget to help the business community (read more here and here) and progressive groups said more could have been done to help the underserved.
Of course, no budget pleases everyone. Here are some of the reasons why Murphy and other Democratic leaders are lining up behind the budget, one that Murphy says, “both invests in New Jersey’s future while preparing for an uncertain global economy.”
Fiscal responsibility
- Surplus: The budget includes a record $6.8 billion surplus, which is both 13.4% of the total — and three times higher than the surplus proposed in last year’s budget;
- Pension: The budget makes a full $6.82 billion pension payment, the second consecutive year that the state will make a full payment;
- Debt defeasance: The budget will make an additional $5.15 billion deposit into the Debt Defeasance and Prevention Fund to support capital construction on a pay-as-you-go basis and avoid future debt issuances.
- Capital investments: The budget allocates over $1.9 billion for the Schools Development Authority’s school facilities projects, emergent needs and capital maintenance — and over a billion dollars for critical transportation projects and train station upgrades throughout the state, including Newark Penn Station and Walter Rand in Camden.
Affordability
- Property tax relief: The budget includes the $2 billion ANCHOR property tax relief program, which will provide relief of $1,500, $1,000 or $450 to more than 1.15 million homeowners and more than 900,000 renters;
- Child tax credit: The budget will offer a tax credit of between $100-$600 per child per family — for families making under $80,000 per year;
- Municipal aid: The budget also helps offset property taxes by including a one-time $75 million boost in aid to towns through a Municipal Relief Fund.
Transformative investments
- Public education: The budget makes an additional $650 million in K-12 formula aid for a total of $9.9 billion in fiscal year 2023;
- Universal pre-K: The budget adds $68 million for Preschool Education Aid, $40 million of which will go towards new districts, creating almost 3,000 more seats for 3- and 4-year-olds;
- Affordable housing: The budget includes $305 million to create thousands of new 100% affordable housing units through the Affordable Housing Production Fund;
- Climate change: The budget includes nearly $30 million to meet the Electric Vehicle Act’s mandate of a 100% electric state fleet by 2035 and funding for a new grant program to support the implementation of the country’s first-in-the-nation climate change education standards.
Key sectors, initiatives
- Strategic Innovation Centers: The budget includes $70 million to support research & development, innovation and entrepreneurship in key industries;
- Real Estate: The budget includes $100 million for Real Estate Projects Funding to redevelop blighted commercial properties and other stranded assets, drive development around transit assets and support projects led by developers of color;
- Manufacturing: The budget includes $37 million for a Manufacturing Industry Initiative to grow and strengthen the state’s manufacturing sector, including programs to spur capital investment, increase the adoption of new technology, attract new suppliers to the state and expand workforce development and training opportunities;
- Film: The budget includes $15 million for the Film Industry Strategic Support Fund, including funds for the proposed Film Academy, which will partner with institutions of higher education to train a workforce for New Jersey’s growing film industry;
- Unemployment and Motor Vehicle offices: The budget includes $24 million for Unemployment Insurance and Motor Vehicle Commission upgrades, including funding for the Department of Labor & Workforce Development to replace antiquated UI systems and hardware and the MVC to improve its camera workstations and update other software and equipment;
- New Jersey Transit: The budget includes $40 million in additional funds for NJ Transit to improve the customer experience and boost resiliency by investing in fare modernization, particularly for bus operations, disaster recovery software and procurement technology.
Health and safety
- Newborn home visitation: The budget includes nearly $20 million in state and federal funds to implement the landmark Statewide Universal Newborn Home Nurse Visitation program;
- Nurture NJ initiative: The budget includes $15 million to raise Medicaid rates for maternity care providers, as well as funds for midwifery education and Connecting NJ Hubs to support families with young children;
- Anti-hunger: The budget also funds a sizable anti-hunger package, spearheaded by Assembly Speaker Craig Coughlin (D-Woodbridge), which will increase funding for Emergency Feeding Organizations by $65 million and provide $18 million to create a minimum SNAP payment that will help nearly 50,000 households;
- Mental health: The budget also includes funding for a mental health package led by the Senate that establishes a statewide behavioral health crisis system of care (including the 9-8-8 mental health crises and suicide prevention hotline) and a $5 million behavioral health care provider loan redemption program;
- Mental health for youth: The budget also allocates over $50 million in ARP funding to strengthen youth mental health supports through an interagency effort to improve access to services, increase awareness and resilience-building, and provide peer supports, professional development and training for mental health in communities, in schools and on college campuses;
- Family planning: The budget provides over $50 million for a major reproductive health package, which increases funds for Family Planning Services, and includes new programs for Family Planning Facilities Upgrades, a Reproductive Health Care Provider Clinical Training Program and the Reproductive Health Security Grant Program;
- Nursing home reimbursement: The budget includes $50 million in additional state and federal funding to increase Medicaid rates for nursing facilities that were among the hardest hit during the pandemic, strengthens quality improvement incentives for nursing homes and increases facility monitoring and oversight.
Murphy said the big budget will have big impact.
“We have wisely avoided using what may be temporary windfalls for long-term programs,” he said. “At the same time, we are making significant investments in new capital projects that will make New Jersey a better state to live in while creating countless good-paying jobs.
“This budget continues to make New Jersey a stronger and more affordable state where opportunity can thrive.”
