Murphy's FY 2021 Budget receives mixed feedback

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Governor Phil Murphy delivers his Fiscal Year 2021 Budget Address in Trenton on February 25, 2020 (Edwin J. Torres for Governor’s Office).
By Bradford Mason
Managing Editor

Gov. Phil Murphy's Fiscal Year 2021 (FY2021) Budget calls for more funding for public education, Pre-K, higher education, public transit and criminal justice reform among other things.

The Governor presented his proposed budget in Trenton this week that includes goals of maintaining fiscal responsibility, improving affordability and stabilizing property taxes, growing the economy, and investing in the states future.

“Our Fiscal Year 2021 budget builds on the significant progress we’ve made for our middle class over the past two years,” said Murphy. “Since taking office, we’ve sought to build a stronger and fairer economy for every New Jersey family, not just the wealthy or well-connected. From fighting for tax fairness to boosting funding for our public schools to stabilizing property taxes, I’m proud to say that our budget prioritizes the needs of all our residents.”

The public will be able to weigh in on the budget later this month. The first of four hearings across the state is set to take place on Tuesday, March 10 at 10 a.m. at New Jersey Institute of Technology in Newark.

Murphy is proposing making a $4.6 billion pension payment, a nearly 13 percent increase over FY2020. The contribution is supplemented by an additional $279 million payment in FY2020. 

The budget includes an additional $336.5 million for K-12 education formula aid, addressing the largest driver of property taxes. The budget also includes $50 million in Stabilization Aid, which will provide one-time assistance for districts facing fiscal challenges as we properly fund the school funding formula. Investments in public education will pay for a new job training program.

“The budget proposal unveiled on Tuesday furthers my Administration’s commitment to level the playing field across New Jersey’s public education system, ensuring that all students have access to a high quality, world-class education,” said Murphy. “Every dollar spent to maintain our position as the national leader in education makes New Jersey more affordable for communities, like Bound Brook, who deserve much-needed property tax relief.”

The Governor is also proposing $83 million in new spending, and $25 million of that amount will be used to assist approximately 30 additional districts that are ready to launch new programs.

Over $50 million of new funds will go towards the outcomes-based funding formula so that four-year public colleges and universities can follow New Jersey’s community colleges and provide two years of free tuition to students with household incomes of less than $65,000 and all students with predictable pricing. The initiative will build on the success of the Governor’s Community College Opportunity Grants, which will continue to enable thousands of residents to attend community colleges tuition-free.

The budget funds the Governor’s new Office of Health Care Affordability and Transparency, which will advance strategies to help consumers and create health care savings. The Office will support the Governor’s proposal to raise the income threshold by $10,000 for the Pharmaceutical Assistance to the Aged and Disabled program and Senior Gold programs, which will benefit over 21,000 seniors. The Governor will also propose creating a state-level health insurer assessment to reclaim revenue previously sent to the federal government. The administration will direct at least $200 million in revenue toward subsidies in 2021 for New Jerseyans purchasing health insurance.   

Over $20 million will go to the state's Department of Labor Workforce Development advancing the Governor’s Jobs NJ plan. The funds will support apprenticeships, paid internships, incumbent career training, and targeted solutions for businesses facing talent challenges. 

Nearly $600 million will support the NJ TRANSIT's daily operations while allowing for bus and rail enhancements, new hiring, and a Battery Electric Bus program that advances the State’s clean energy goals. 

The budget includes almost $30 million in implementation funds for Earn Your Way Out and Hepatitis C treatment, as well as new funds for transitional housing and job training.

“We’re doing what no one thought possible,” said Murphy. “We are making real progress against high property taxes, restoring New Jersey’s fiscal standing, growing our economy, and repositioning our state for success by investing in and shaping our future. We have a record of unmistakable progress on all fronts, and today, we have a new budget for FY2021 that promises to keep us moving forward in building a stronger and fairer New Jersey for all.”

Many are praising Murphy for his proposed budget saying the funding is going to some of the state's most disadvantaged.

Senate President Pro Tempore M. Teresa Ruiz applauded the budgets funding for public education.

“By continuing to ramp up towards fully funding public schools at the state level we can improve the quality of education while also reducing property taxes," she said. "As we work to redistribute school funding so the funding follows the student, stabilization aid will help provide overfunded schools with a smooth transition."

Milly Silva, Executive Vice President of 1199SEIU, said the budget prioritizes working people instead of the rich.

“Investing resources to uplift working families and responsible financial stewardship go hand-in-hand. 1199SEIU is eager to continue its partnership with Gov. Murphy and state legislators to ensure that healthcare funding is used by providers in transparent, responsible ways that improve patient care and outcomes.”

The proposed budget is drawing criticism from some state lawmakers that say it will be a burden to 
some New Jerseyans.

The budget is calling for applying the millionaire’s tax enacted in FY2019 to all income above $1 million, not just income over $5 million. Murphy says the increase  will impact more non-New Jersey residents than in-state residents.

Republican Assemblywoman BettyLou DeCroce says increasing spending by another $2 billion and raising taxes and fees will hurt middle class families. 

"Governor Murphy is driving the state’s financial bus in the wrong direction. In a state screaming for tax relief, there was not one sentence in his address that called for cutting spending on anything," DeCrose said. Sadly, his progressive agenda of more spending is simply unsustainable no matter how many rich people you tax."

N.J. Chamber of Commerce President Tom Bracken says the budget does not address how to make the economy stronger for businesses and taxing the rich is a the wrong move.

"In making this proposal, the Governor said there is no proof New Jersey’s highest bracket taxpayers are leaving the state," he said. "The study by Wealth X in 2019 showed very clearly that more than 5,000 residents with net worth over $1 million had fled New York and New Jersey in 2018."

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