New Jersey Gov. Phil Murphy kicked off the budget season by announcing his spending priorities for the fiscal year 2024, which begins July 1.
His major priorities include enhancing affordability by continuing tax relief initiatives enacted last year and increasing the state’s budget surplus to $10 billion in preparation for a possible recession.
“It is a budget designed with a singular purpose to continue building the next New Jersey,” Murphy said. “A New Jersey where every family can afford to make their American dream come true, a New Jersey where every child could see their opportunity in our common future, a New Jersey where our seniors can afford to retire, and live in dignity, a New Jersey that leads the nation in responsible, common sense, and far-reaching solutions to the economic, social, and environmental challenges we currently face and is prepared to take on those not yet identified.”
The Murphy Administration wants to heavily invest in the rollout of universal Pre-K, double the state’s child tax credit benefits up to $1,000 per child, and provide an additional $830 million to fund K-12 education.
The Democrat’s record $53 billion plan also calls for the renewal of the ANCHOR property tax relief program, which provides tax credits for more than 2 million eligible residents, and an expansion of the Senior Freeze property tax relief program.
Micah Rasmussen, a political analyst and director of the Rebovich Institute For New Jersey Politics, called Murphy’s proposal a “feel good” budget.
“This is a budget that's got things that Republicans and Democrats alike should agree on,” Rasmussen said. “People should agree on property tax relief, they should agree on education aid increasing because we know that the cost of paying teachers and benefits goes up and their salaries go up.”
Rasmussen said as lawmakers campaign for re-election this year, they’ll make some adjustments — though he expects the Murphy Administration will largely get its way.
Republicans and progressives both expressed some disappointment with Murphy’s proposal. Like in previous years, the GOP wanted a cap on government spending, a decrease in tax collections, and an indexing of tax brackets.
“Murphy's budget proposal for next year is 5% larger than this year’s budget, and it’s 50% bigger than the prior administration's final budget,” said Senate Minority Leader Steven Oroho (R-Sussex). “That's a huge and unsustainable spending increase in just six years. We know that billions of that will likely be pork spending that should be redirected to tax relief.”
Groups like New Jersey Citizen Action and the New Jersey Policy Perspective lament Murphy’s intention to sunset the 2.5% corporate business tax surcharge for the state’s wealthiest companies at the end of 2023. It had been in place for the past five years.
Eliminating the corporate business tax surcharge would cost the state at least $664 million in annual revenue, according to the New Jersey Policy Perspective.
“This tax cut will only benefit a small handful of New Jersey’s wealthiest businesses at the expense of the vast majority of New Jerseyans. We need our leaders to make long-term, sustained investments in the working people of New Jersey, not temporary investments that come and go. Vulnerable communities cannot build upward economic mobility overnight,” said Dena Mottola Jaborska, New Jersey Citizen Action Executive Director.
Business groups like the Chamber of Commerce Southern New Jersey (CCSNJ) heralded the move. However, the chamber shared similar concerns as Republican lawmakers on this year’s increase in spending.
“As proposed, a $53.1 billion budget is the largest budget in state history,” said Christina M. Renna, president and CEO of the Chamber of Commerce Southern New Jersey. “The CCSNJ’s fear is that to maintain this level of year-over-year growth in spending, New Jersey will inevitably have to raise taxes on its already overburdened residents and businesses.”
Kadja Manuel, a Trenton resident and a former candidate for city council, hopes state lawmakers will prioritize aid to the capital city, which has been in financial straits for years.
Manuel called Trenton a “food desert” and said the city needs greater investment in access to nutritious meals and healthcare services.
“Gov. Christie wasn't giving us anything — a couple of million dollars,” Manuel said. “Gov. Murphy has improved what the state is giving Trenton, but it's still not enough. Trenton is hurting and the only way to make sure that people have access to fresh produce, have access to mammograms and health screenings, have access to COVID vaccines, is to support [those initiatives].”
Murphy’s budget makes full payments on state pension plans for the third consecutive year and funds a first-time homebuyer program.
The second-term Democrat also pledged to reduce New Jersey’s debt with a $2.35 billion deposit in the Debt Defeasance and Prevention Fund.