Gov. Phil Murphy offered his 2022 budget with no tax hikes in a speech that could be easily viewed as his goals for funding the state government as well as stump speech for his re-election bid this November.
Murphy said the state’s priorities as laid out in the budget are to “build a New Jersey that emerges from the pandemic healthier and more resilient, both physically and economically. A stronger and fairer New Jersey not just for today, but for the generations to come. To change what’s wrong and make sure we get it right for the future.”
In a 45 minute prerecorded speech filmed in an empty Trenton War Memorial, the governor’s $44.83 billion spending proposal assumes 2.4% growth in total revenue and includes a sizable surplus of just under $2.2 billion.
“This budget is built to spark New Jersey’s recovery,” said Murphy. “We’ve been working for the past three years to build its foundation. Certainly when our administration took office in 2018, no one had any clue of what 2020 had in store for our state, our nation, and our world. But the decisions we’ve made have proven right not just for those times, but for the times we are facing now.”
Murphy outlined a spending proposal for Fiscal Year 2022 highlighted by investments he sees as helping New Jersey emerge from the coronavirus pandemic stronger, fairer, and more resilient.
“This budget lives up to our stronger and fairer mission,” said Murphy. “Stronger to come out of the pandemic with an economy that works for every New Jersey family. Fairer to help families and small businesses hit hard and left behind in the pandemic’s brutal wake.”
The governor later added, “Our problems weren’t created overnight and, frankly, they won’t be fixed overnight. But I know that brighter days lay ahead.”
Full Pension Payment
Among the key proposals from the Murphy Administration include a full pension payment for the first time since 1996, providing the highest level of school funding in history, delivering direct tax rebates to over middle-class families, and providing $200 million in relief for small businesses.
The proposed budget makes good on the governor’s promise to public employees by including an additional $1.6 billion for a proposed $6.4 billion pension payment to meet the goal of contributing 100% of the Actuarially Determined Contribution to New Jersey’s pension system a year earlier than initially planned. Murphy claims the move will save taxpayers $861 million over the next 30 years.
“The problems in our pension system, rather, have everything to do with past administrations, of both parties, and going back 25 years, who simply and short-sightedly decided not to pay,” said Murphy. “In fact, some suggest, even today, that we skip out on our pension obligation. We won’t go back to those failed, old ways. “
Higher Revenue Projections
Officials said revenue projections have improved in part due to record high stock markets, federal stimulus that directly aided individuals and businesses, as well as what economists describe as a K-shaped recession, which has seen middle and high-income households recover more quickly while low-income households have continued to struggle.
The budget proposal aims to address these inequities by directing resources where they are needed most in order to build a stronger post-COVID New Jersey.
“This is a budget for New Jersey’s middle class, New Jersey’s dreamers and innovators, and New Jersey’s next generation of pioneers,” said the governor. “We’ll be able to maintain and grow our investments in the key areas that will power our state’s emergence from the pandemic and drive us confidently into the future.”
The governor touted as a result of last year’s millionaires tax enactment, the proposed FY2022 budget includes $319 million in direct tax relief for middle-class families, which will provide up to a $500 rebate to over 760,000 couples and individuals with qualified dependents. The budget also includes $1.25 billion in funding to support various property tax relief programs.
The proposed budget takes a multi-departmental economic growth initiative to boost economic recovery in New Jersey communities, including provide access to capital for minority-owned businesses, and help government support sustainable economic growth. This roughly $200 million investment initiative includes:
- $100 million allocated from the recently passed Economic Recovery Act Main Street Recovery Finance program
- $25 million for EDA’s lending programs such as Premier Lender and Microbusinesses;
- $20 million for the NJRA’s Urban Site Acquisition Fund and Redevelopment Investment Fund, the first State investment in the NJRA since 2002; and
- $15 million for permit modernization across State departments and for local governments
“These investments are critical to ensuring that the New Jersey which emerges from the pandemic provides even more opportunities for success than the New Jersey pre-pandemic,” said Murphy. “Creating these opportunities will be an economy fueled by innovation and powered by small business.”
Increasing Educational Opportunities
An emphasis on educational investment continues in the proposed spending document, increasing formula aid by $578 million. Proposed in the Murphy’s budget includes the expansion of Pre-K by $50 million, including $26 million for new programs; special education aid by $25 million; $50 million to fund The Garden State Guarantee, which provides two years of free tuition at four-year institutions for students with household incomes of less than $65,000; and $27 million in the Community College Opportunity Grant program, which provides tuition-free community college for eligible students.
“This funding increase also acknowledges the fact that some students have fallen behind due to the burden of remote learning,” said Murphy. “This increased investment will help stem the learning loss we know has happened, and it will help bring our students back up to par.”
Healthcare spending figures prominently in the proposed budget as well. The governor announced a new initiative, Cover All Kids, with the ultimate goal of ensuring affordable, accessible health coverage is available to nearly 88,000 children without coverage.
Other investments being offered include an additional $25 million in NJ Health Plan Savings subsidies; raising the income threshold by $10,000 for the Pharmaceutical Assistance for the Aged and Disabled and Senior Gold programs, which the administration say will benefit over 20,000 seniors; $19 million to support the new Reproductive Health Care Fund, and $19.5 million for Family Planning Services, bringing the total the administration will have provided over four years to nearly $74 million, after years of defunding by the prior administration.
“Making healthcare more accessible and more affordable is a smart thing to do in good times,” said Murphy. “It is even more critical now given the times we’re currently in.”
No NJT Hike
For NJ Transit riders, for the fourth consecutive year there will be no fare hike. Total resources for the agency will increase 9% to $2.65 billion and continue to reduce diversions from the agency’s capital fund for operating costs, marking the lowest transfer in 15 years.
Additionally, Murphy is proposing investments to modernize critical operations and technologies in the Motor Vehicle Commission and the Department of Labor–two areas where the pandemic exposed shortcomings, according to Murphy.
“Too many people across New Jersey paid the price for that long standing neglect,” said the governor. “So, this is my simple, clear message: New Jersey is done kicking problems down the road. We are solving them.”
Additional proposals include $200 million for the offshore wind port, $200 million for current Schools Development Authority (SDA) projects to reduce debt issuance; $75 million for the SDA’s Capital Maintenance and Emergent Needs Grant program; $60 million to support the continuation of the Drinking Water and Clean Water Infrastructure Fund; and $86.6 million for critical capital improvements, including emergent life safety and IT projects.
Budget Fixes Society Inequities
Murphy concluded by stating since he was sworn in as governor three years ago, his administration has worked to secure the full promise of New Jersey for every resident and every family, claiming its a vastly better place for countless middle-class and working families as the growth of property taxes have slowed more than ever, healthcare is more accessible, schools are better funded, childcare is more affordable, and the economy is gaining strength as it continues to be more equitable.
“This a budget purpose-built to fix the inequities that have been allowed to exist for far too long and to spark our economy for the long-term to work for everyone,” said Murphy. “To change what’s wrong and make sure we get it right for the future.”