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State Sen. Paul Sarlo (D-Wood-Ridge). (Photo: Kevin Sanders for New Jersey Globe)

Full Senate clears budget in party-line vote

By Nikita Biryukov, June 24 2021 1:51 pm

The New Jersey State Senate passed Democrats $46.4 billion spending bill in a 25-15 vote along party lines early Thursday afternoon.

The massive appropriations bill, one fueled by a $10 billion windfall of federal funds and better-than-expected collections, represents a 15% year-over-year spending increase from the current fiscal year’s budget and passed with yes votes from all 25 Democrats and not a single Republican.

It includes $319 million for tax rebates of up to $500 for New Jerseyans with dependents and a boost to the Homestead Benefit Program, which will boost payments after lawmakers updated it to use tax bills from 2017 instead of 15-year-old ones from 2006.

“This legislation represents a smart and responsible budget,” Senate Budget Committee Chairman Paul Sarlo (D-Woodridge) said.

Other provisions include $750 million in federal money for rental and utility payment assistance, with another $200 million to provide an extra year of special education classes for the next three years.

They’ve also put $3.7 billion into a debt defeasance fund. Most of that money, $2.5 billion, must be used to pay down existing debts. Staff have identified about $3.2 billion of debt that can be paid down using $4.3 billion borrowed earlier this year to fill a budget hole that never materialized.

That borrowing was raised as an issue on the floor by State Sen. Steve Oroho (R-Franklin), the minority’s budget officer.

“We paid expenses and fees for borrowing that was completely, completely unnecessary,” he said.

The remaining amount in that fund, roughly $1.2 billion, will be used to fund capital projects. Democrats say that money will allow them to forgo future borrowing.

He also lamented the lack of tax cuts in this year’s budget. Republicans had unsuccessfully pushed a budget plan that would have seen more of the $10 billion windfall be paid back to taxpayers.

The chamber’s GOP members also challenged their Democratic counterparts over an increase to the state unemployment tax set to go into effect next month, saying the hike could have been prevented in the appropriations bill.

“The payroll tax increase we can prevent is set to hit employers just one week from today,” Senate Minority Leader Tom Kean said. “That is unconscionable”

There was also some question about the presence of rebates in an election year that’ll see Gov. Phil Murphy and every seat in the legislature put on the ballot.

“Surprise, surprise, some of the money is going out right before an election,” Oroho said.

This year’s budget process has renewed criticism about transparency in Trenton. Democrats in both chambers advanced the budget in party line votes made just minutes after the full text of the 280-page bill became public for the first time.

Other bills, including one appropriating $115 million in leftover funds from the current fiscal year, were advanced through committee without any public text. Sarlo, who sponsored the supplemental spending bill, was unable to say what the measure funded at Tuesday’s Budget Committee meeting.

Sarlo, perhaps anticipating an attack that indeed came along that line, sought to reframe the opaque process.

“This is a 280-page document you’ve had for three to four months. Not sure if you’ve read it, but you’ve had it for three to four months,” he said, adding the changes to the bill between now and February accounted for only about 5% of the bill.

The measure also contains hundreds of millions of dollars for “Christmas Tree” items, named because they serve as gifts to legislators whose districts they grace.

Budget resolutions showing which lawmakers requested the individual spending items, required to be posted two weeks before the final budget vote, were unavailable online early Thursday afternoon. Sarlo and Senate President Steve Sweeney (D-West Deptford) said those resolutions would be made public after Thursday’s votes, though last year’s resolutions were not posted until months after the fact.

Republicans spent little time mentioning the resolutions, though they did take aim at the Christmas Tree items, which some Democrats acknowledged on the floor.

“This budget represents and orgy of pork and unnecessary spending,” said State Sen. Michael Testa (R-Vineland)

Murphy has declined to say whether he’ll line-item veto spending for any legislative priorities, though he isn’t expected to do so.

Despite the controversies, this year’s spending bill does reverse some bad budgeting practices common to New Jersey in previous years. Lawmakers are depositing $1.3 billion into the state’s rainy-day fund, its emergency surplus.

They had intended to keep the fund bone dry before receiving an unexpected $4 billion boost in revenues. They’re also putting about $500 million into the state’s unrestricted surplus.

Some Democrats expressed concerns about the budget bill while still supporting the measure. State Sen. Ron Rice (D-Newark), the immediate past chair of the Legislative Black Caucus, lamented the lack of funds for children’s and after-school programs in urban areas.

The bill also fell back to some budgeting practices that Democrats have criticized for years.

NJ Transit’s operating budget is still being funded through a transfer from the beleaguered transportation network’s capital budget and $82 million from the Clean Energy Fund. It’s also receiving federal dollars.

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