New Jersey’s four-month sprint to a state budget began today with Gov. Phil Murphy’s Fiscal Year 2024 Budget Address, which he used to expound on the issue of tax relief and emphasize his budget proposal’s lack of new taxes or fees – both frequent themes during the governor’s second term.
“This entire budget is purpose-built to help you find your place in the Next New Jersey by securing your place in the New Jersey of right now,” Murphy said. “Indeed, this is a budget focused on the pocketbooks of our families. It provides more direct tax relief to help folks out from under stubborn inflation which makes it hard to cover the basics.”
Murphy’s budget proposal, which will be hammered out in the legislature in the coming months before the end-of-June deadline, appropriates $53.1 billion, with a huge $10 billion surplus. That’s higher than last year’s already-large surplus, and dwarfs the budget surpluses New Jersey was seeing when Murphy took office.
“Why is this important? Because for too long our fiscal house stood on a foundation of sand,” Murphy said. “This surplus – all $10 billion-plus of it – is a signal to the credit rating agencies that we can pay our bills. That our foundation is strong. Even more, it is a signal to our taxpayers that we treat every one of their tax dollars with the same care they do.”
At the top of the governor’s budget agenda, just like last year, are property taxes.
New Jersey has long had some of the nation’s highest property taxes, but last year’s budget launched the ANCHOR property tax relief program, which Murphy hyped up today. This year’s budget, Murphy said, will focus on a number of other affordability programs, including the Senior Freeze property tax relief program and an expansion of the Child Tax Credit, as well as several programs designed to lower health care costs and eliminate medical debt.
Such programs will likely be at the heart of Democratic legislative campaigns this year; all 120 legislative seats are up in November, and Democrats are seeking to hold off further Republican gains after their unexpected 2021 losses.
Murphy also emphasized funding for K-12 education – $11 billion in total, an $830 million increase from last year – and for pre-kindergarten, which he said would be funded to the tune of $1 billion.
“[The cost of pre-K] leaves too many parents – disproportionately moms – with no alternatives than cutting back on hours or even leaving work entirely, putting their family’s financial future on hold,” he said. “So, every new seat we can create in a pre-K classroom makes life more affordable for working parents.”
But at the core of the budget, as the governor repeatedly returned to, is taxpayer assistance and fiscal responsibility.
“We worked hard to put New Jersey in position to get its first credit upgrades in nearly two decades,” Murphy said. “But I am not ready to stop at three. So, this budget is designed to support the next round of credit upgrades. It is designed to build even greater confidence in our direction and in our ability to honestly meet our obligations.”
That means making a full pension fund payment for a third year in a row, and “set[ting] aside more than $2.3 billion to either pay down existing debt or keep us from taking on new debt entirely,” Murphy said.
Murphy also touched on a number of other important topics during his address, though not all may be covered by the budget itself.
He urged the legislature to pass a prescription drug bill package and to work on reforming the state’s liquor license system, a proposal he unveiled last month. He said that NJ Transit’s capital program would be better funded without increasing fares. He promised to keep on working towards a more environmentally friendly state through increased funding for electric vehicles, green spaces, and more.
And he recommitted to ending the Corporate Business Tax surcharge, an issue on which many of his progressive allies have broken with him (and which received a tepid reaction from Democratic legislators in attendance today).
“We hear from the business community that allowing this surcharge to lapse will mean more money for them to create jobs, to invest in new and more efficient equipment, to lower costs to consumers, and to be able to stay here,” Murphy said. “Ending this temporary surcharge is simply one way we compete for the world’s leading companies and make New Jersey the place where entrepreneurs will want to come to start new ones.”
What the assembled crowd of legislators, staffers, lobbyists, activists, and journalists heard today is not what the legislature will ultimately pass in June. Hashing out the eventual budget is a process that will involve significant give and take between the legislative and executive branches, though this affordability-focused budget is likely to be less contentious than some of those from Murphy’s first term.
By then, the statehouse’s renovations may finally be done; Murphy said that he may be working in his proper office, which has been under construction since the beginning of his governorship, “in just a couple weeks.”
But for now, Murphy pledged to fight for the “Next New Jersey” he outlined in his State of the State Address: a socially welcoming, fiscally prudent state that is open to all.
“So, in service to everyone who sent us here, let us join together as we shape this next budget and commit to this – the Next New Jersey is where opportunity grows, where rights are protected, and where we fight for each other, not with each other,” he said. “And most of all, let us continue making New Jersey the state where hard work pays off.”