Since Gov. Phil Murphy presented his fiscal year plan to state lawmakers Feb. 28, the budget committees of the State Senate and Assembly have held 24 meetings with the different heads of the departments as well as input from the public in setting spending priorities for the next fiscal year.
The process has lawmakers on both sides of the aisle asking Murphy Administration officials to justify their budgets as well as questioning the practices of each department, which has lead to confrontation at times.
Among the department heads that have testified through the month of April include education, health, attorney general, labor, corrections, treasury and human services, question by Trenton lawmakers for two to three hours at a time.
“Sometimes I think up here on this committee we appropriate dollars to the various departments and then when we come back a year later, we find out the money is sitting there and not being actually utilized properly,” State Sen. Paul Sarlo (D-36) recently commented during a committee hearing. “I get very frustrated.”
In April, the Murphy cabinet member on the hottest of seats was New Jersey Department of Education Acting Commissioner Dr. Angelica Allen-McMillan. Both Democrats and Republicans have questioned the results for the amount of money—$11 billion for Fiscal Year 2024 alone—the state has poured into New Jersey schools.
Grilling Education Commissioner
Among the topics Allen-McMillan was grilled on were the funding formula, known as S2, learning loss and the effect that cuts in state aid have had on property taxes.
Allen-McMillan, while declining to specifically talk about property taxes when asked by Assemblywoman Nancy Munoz (R-21), defended that the school funding formula has been “the clear way of providing proper funding to every school district based on the same set of factors over a seven-year period.”
The acting commissioner offered that it is the responsibility of local schools boards in light of changes in populations to prioritize their spending as state needs to make sure urban schools are not underfunded as they were in the past.
GOP Pushed for Pandemic Funds
“We do not turn a deaf ear. We understand that right-sizing is challenging,” said Allen-McMillan. “Right-sizing can look different every year, and we’re here to support them in that process as they may have to make some difficult decisions.”
GOP lawmakers, especially during the education hearings, have pushed for allocation of some of the $10 billion projected surplus or unspent federal pandemic money to ease the burden on taxpayers and cuts to schools in their districts.
“There is absolutely no reason the Murphy Administration can’t dedicate or repurpose some of the unspent $5 billion of pandemic relief funds at its disposal,” said State Senate Minority Leader Steve Oroho (R-24). “The longer the Murphy Administration sits on unspent pandemic relief funds, the greater the risk those funds will be clawed back by the federal government.”
The issue of learning loss was pushed by State Senate Majority Leader M. Teresa Ruiz (D-29), who said that 58% of kids not reading at grade level will have negative outcomes in the long-term.
“The percentages are deplorable. I know there’s a huge commitment from the board and the district to attempt to mitigate it through all these strategies … I don’t know what’s working and what’s not working,” Ruiz said. “Nobody wants to talk about the alarming truths that are facing our constituencies or the remedies that are not going to be so great in certain circumstances.”
The budget process in Trenton began with testimony from State Treasurer Elizabeth Maher Muoio and officials from the nonpartisan Office of Legislative Services (OLS). Both reported the tax revenues were robust but disagreed on by how much.
How Much Revenue Available?
OLS officials said in testimony it expects the state to collect a slightly smaller amount of revenue than the Murphy Administration has predicted in the fiscal year that begins July 1, a total of $53.1 billion in revenue. Maher Muoio estimated the state revenues to be about $700 million more.
Sarlo urged his fellow committee members to use the lower number as they await more complete revenue information due this month.
“I think we actually should go into the budget based on (the OLS) number and not the executive’s because I think there’s going to be, although not a recession, there’s going to be a further softening of the economy,” Sarlo said in late March.
State Health Benefits Increase Debate
One of the sharpest exchanges came between Ruiz and Maher Muoio over the state workers health benefits insurance premiums that spiked by 20% last year, with the Essex County lawmaker saying it was “unfathomable” that Treasury official did not warn lawmakers of the potential for an increase during Fiscal Year 2023’s budget process.
Muoio pushed back that rates were unknown until June last year and the it was a matter that Trenton lawmakers could have addressed.
“All we could be forthcoming about was we saw utilization going up…Now, should we have been waving a flag saying ‘Locals, beware: If we’re seeing it, you’re probably seeing it’?” said the state treasure. “There was always the possibility once we knew the rates that if the Legislature wanted to do a supplemental to send money to the locals, you could.”
Another issue that has plagued the state—judicial vacancies—will continue without action from the State Senate, according to Judge Glenn Grant, Administrative Director of the Courts. While lawmakers have recently reduced the numbers of State Superior Court vacancies to 58 from 75, the court faces another wave of vacancies in the coming months.
“We need to get our number between 25 and 30 to have a realistic chance to dig ourselves out of this hole, and it’s going to take at least three years for us to do that. There’s no magic,” said Grant, who explained that at least 22 judges are set to retire by the end of the year, either voluntarily or because they will reach the mandatory retirement age of 70.
“Without additional relief, without more judges, we may well be faced with similar needs to suspend civil and matrimonial trials in other vicinages,” Grant said.
Car Thefts Down
“There is a huge pool out there. I just wish a lot more of them would come forward and raise their hand and say ‘we want to serve,’” Sarlo said. “There is an amazing pool out there, a very diverse pool as well, that we are hoping will come forward.”
The budget hearings provide administration officials the occasion to update lawmakers in a public setting to highlight actions that they have in the last year provided results. New Jersey Attorney General Matt Platkin informed committee members that violent crime has descended from post-pandemic peaks and car thefts were down from record highs reached last year.
Platkin said one of the reason for the drops was the auto theft task force headed by New Jersey State Troopers as well as resources and staffing being boosted.
“Great job, but don’t take your foot off the break,” commented Sarlo. “The constituents that we represent, one of the most pressing issues that they will bring up in town hall meetings and mayor and council meetings, whether they’re going to the Garden State Plaza or to restaurants, it’s still one of their No. 1 issues.”
Paterson Police Department
Platkin’s appearance came in the days after the takeover of the Paterson Police Department. He said his office will request additional funding to aid in the state’s attempt to restore trust between the community and the officers that serve them.
“We have a long way to go, but I am confident in our success, both in rebuilding that trust with the community but also in providing the officers of that department the stability and resources they need to do the job so many of them desperately want to do,” Platkin said.
Department of Corrections Commissioner Victoria Kuhn was questioned by Assemblyman Brian Rumpf (R-9) on her $1.2 billion state budget request as the state’s prison population has fallen by half in the past decade. But over the same time, the system’s per-person cost has almost doubled.
Corrections Spending Questioned
“Why aren’t we seeing a reduction in spending that goes along with that reduction in incarceration?” Rumpf asked. “One of the frustrations, I’m sure for all of us and for the taxpayers, is school funding—and my district is losing $13.8 million as a result of enrollments going down.”
“Meanwhile, we see the prison enrollment going down substantially, particularly during COVID, but the costs are going up. It would seem to me the reverse would be more appropriate.”
Lawmakers questioned as well the wisdom of renting equipment to keep the facilities running—some for multiple years—instead of making the capital investment now to save money in the long run.
Life After Pandemic Aid
In charge of the state’s largest agency, Human Services Commissioner Sarah Adelman sought to reassure State Senators that New Jersey will not be scrambling for funds after federal aid associated with the pandemic ends.
“When you’re receiving a lot of one-time money, you want to think about how you use those funds strategically, to build up an infrastructure that supports our needs now, supports our needs in the future, and doesn’t create spending cliffs for the state,” said Adelman.
The department plans to devote $172 million in state and federal funds to targeted wage assistance industries that faced staffing crises for much of the pandemic, such as nursing aides, child care providers, and behavioral health providers. Adelman noted the worker shortages have persisted as New Jersey moves out of the COVID-19 crisis.
Detente With Labor Commish
State Sen. Doug Steinhardt (R-23) offered that “the healthcare workforce shortage is a major crisis that I think was exacerbated by the pandemic, leaving real implications for the thousands of New Jersey residents that rely on the care of direct care workers.”
The appearances of state Labor Commissioner Robert Asaro-Angelo during the pandemic had produced some of the most significant confrontations between committee members and representatives of the Murphy Administration. But this year, both parties agreed that progress had been made.
“I’m very happy about the path we’re on,” said Asaro-Angelo. “Will I ever be happy and feel like we’re at a final point? No, I don’t think so. It used to be, ‘here’s your system, here’s our technology, and we can’t do anything about it until we put out another contract’ … that’s just not how we’re going to operate in this division anymore.”
One of his harshest critics, State Sen. Michael Testa (R-1) even praised the commissioner for addressing fraud and making efforts to protect residents from “really despicable behavior” by those trying to game the system.
“I really appreciate the fact that we are fighting fraud, because there was a time when there were predators who were really trying to prey on individuals during a 100-year pandemic,” Testa said.
The State Senate and Assembly will continue to hold budget hearings through May. The state constitution mandates a balanced budget with no deficit must be ratified by July 1.