Murphy Vetoes Bill That Would Have Made it Easier for Schools to Raise Taxes

TRENTON — There will be no wider berth for New Jersey communities faced with school funding cuts this year.

Gov. Phil Murphy vetoed legislation Monday that would have allowed for certain school districts to raise property taxes above the state's 2% year-to-year tax growth cap without voter approval.

"Before middle-class property taxpayers have to again take it on the chin, we should be asking our wealthiest residents to pay their fair share through a millionaire’s tax,” Murphy said in a written release.

Murphy has long made a so-called millionaire's tax a top legislative priority — but faced pushback from state legislators including state Senate President Steve Sweeney. Opponents argued another big tax hike that could accelerate out-migration and have a negative impact on jobs. Murphy and legislators narrowly avoided a government shutdown two years in a row as they battled over the proposal.

The measure vetoed Monday would have provided an exemption to the 2% property tax levy cap for certain school districts that are spending below adequacy and also seeing a reduction in state educational funding due to this year's enactment of school funding legislation.

Murphy noted that the bill in question was introduced in December 2019 and sent to the Governor’s desk in just 11 days.

“State-level decision makers should not delay difficult funding decisions until the end of the legislative session and fast track what amounts to a tax increase on the middle class without first exhausting all other options,” the governor said in his full veto message.

Murphy also said "I do not accept the notion that the state’s only response to school districts that are seeking help should be to let them raise property taxes on their residents without their approval."

Under the school funding formula approved in 2018, all districts receive state aid based on a formula that takes into account actual student enrollment and projected population growth, while phasing out “adjustment aid.”

Nearly 200 school districts are losing state aid in 2020 despite the overall increase in education funding, while 368 school districts will see an increase in aid this year. It is the second step of a seven-year phase-in of changes to the funding formula.

Asked whether Assembly Democrats had a response to the veto, the Assembly Majority Office said "We respectfully decline to comment at this time."

With previous reporting by Michael Symons and Eric Scott.