13 Things to Know About NJ State Budget Racing Toward Approval
TRENTON – Lawmakers meet this afternoon to begin approval of New Jersey’s 2022 state budget, with the intention of getting it to Gov. Phil Murphy’s desk Thursday.
Text of the bill wasn’t available as of Tuesday morning, though on Monday night the Office of Legislative Services did publish a ‘score sheet’ of changes from Murphy’s original budget blueprint and a summary of changes to budget language.
Here is a baker’s dozen things to know about the spending plan cooked up at the Statehouse:
1. The budget appropriates $46.38 billion
That's up from the $44.8 billion planned back in February. Lawmakers are also due to take up a bill adding nearly $115 million in spending to the current budget that is about to expire.
The spending increases include:
- $6.5 million in the Legislature;
- $1.5 million in Murphy’s office;
- $6 million in Agriculture;
- $15 million in Children & Families;
- $134 million in Community Affairs;
- $21 million in Corrections;
- $431 million in Education;
- $3 million in Environmental Protection;
- $100 million in Health;
- $73 million in Human Services;
- $5 million in Labor and Workforce Development;
- $20 million in Law & Public Safety;
- $169 million in State;
- $39 million in Transportation;
- $268 million in Treasury;
- $252 million in interdepartmental accounts;
- $3.6 million in the Judiciary.
2. Lots of ‘Christmas tree’ items are added
These are extra grants and programs added at the behest of lawmakers. They include $300,000 to improve the Franklin Township Little League field; $500,000 for a band shell at Woolsey Park in Hopewell Township; $350,000 to returf Myrtle Charles Park in Metuchen; $10 million for the North Bergen school district to buy property; and $72,000 to Long Branch, Oceanport and Monmouth Beach to help support municipal fish kill cleanup.
3. Tax collections for the coming year are projected at $42 billion
Republicans say that structural deficit could lead to tax increases a year from now. It appears that in many cases, when the Treasury forecast and Office of Legislative Services forecast differed, the budget bill adopts the smaller projection.
4. Dipping into 'rainy day fund'
Although the budget starts with a $10 billion surplus, the state will nevertheless use $883 million from its “rainy day fund” meant to hold unanticipated surplus revenues until a time of fiscal distress. But the fund – which starts the year with $2.2 billion and ends it with a projected $1.3 billion – was going to be entirely drained under Murphy’s original budget, so it is being partially protected.
5. Budget surplus
The overall year-end state surplus for June 30, 2022, is projected at nearly $5.8 billion. The unrestricted surplus is $500 million, down from $4 billion at the start of the budget year. The surplus includes $3.7 billion put into a Debt Defeasance Fund, including $2.5 billion to pay down higher-cost debt and $1.2 billion to avert future debt increases by covering the cost of capital projects on a pay-as-you-go basis.
6. Money for NJ Transit
NJ Transit’s operating budget will still rely on transfers from New Jersey’s clean energy programs and the agency’s capital budget. Senate Majority Leader Loretta Weinberg, D-Bergen, is displeased. But affordable housing programs that were going to be funded by the Affordable Housing Trust Fund will instead come from the general budget, at a cost of $57 million.
7. School funding
The budget maintains the planned school aid cuts to around one-third of districts, continuing the transition back to the long-ignored school funding formula despite the tax windfall. An additional $100 million was added for extraordinary special education expenses aid, which is shared statewide.
8. Funding the pensions
The pension payment, already penciled in at a record $6.4 billion to mark the first full contribution in more than two decades, grows another $505 million to around $6.9 billion. The state has been lowering its assumption for how much its investment assets will return each year and will move that from 7.3% to 7% a year earlier than planned.
9. Tax breaks for retirees
A tax exclusion on retirement income will be expanded to cover income between $100,000 and $150,000, in two additional brackets. That will cover around 69,000 retirees.
10. Aid for college students & families
New tax savings for college expenses will be available for families making up to $200,000. The budget also adds another $37 million in direct aid to students through Tuition Assistance Grants and the Educational Opportunity Fund.
11. Transportation funding
An additional $75 million is included in the budget for local transportation projects.
12. Money for hospitals
Charity care funding to hospitals for their care for uninsured patients is increased by $40 million.
13. Aid for immigrants
The budget now includes $3 million for legal services for unaccompanied minors, an expansion of the legal help the state has been providing to immigrants facing deportation. But it doesn't include direct aid for "excluded workers" who weren't eligible for stimulus checks or unemployment benefits.