- Governor Murphy Delivers FY 2020 Budget Address
- Legislative Leaders' Response
Governor Murphy Delivers FY 2020 Budget Address
Governor Phil Murphy unveiled his Administration’s $38.6 billion budget on Tuesday, calling it his “Blueprint for the Middle Class”. The proposal, according to the Administration, is built on four elements:
- Realizing over $1.1 billion in sustainable savings
- Stabilizing New Jersey's credit-worthiness through responsible fiscal stewardship.
- Maintaining and growing investments in education and infrastructure, especially NJ TRANSIT, and building an innovation-driven economy
- Ensuring tax fairness for the middle class
Sustainable Savings: A centerpiece of the budget proposal is achieving nearly $800 million in public employee health benefit cost savings from a just announced collective bargaining agreement with the Communication Workers of America, the largest of the public sector unions representing state employees. The plan also anticipates $200 million in state cabinet department savings and efficiencies.
Fiscal Stewardship: The Governor announced that the budget will include a $1.16 billion surplus and will reduce the reliance of “one-shot” revenues to 1.7 percent of the total budget. It also lessons the use of fund diversions, including cutting the diversion of Clean Energy Funds by approximately $71 million.
Growing Investments: Investments include an additional $100 million in General Fund support for NJ TRANSIT and no fare increases for NJ TRANSIT commuters. It provides an additional $206 million in education aid to meet what is required to continue the path to fully fund the state’s school funding formula and allocates $68 million to help expand pre-K. The budget also provides an additional $33.5 million to allow a total of 18,000 qualified students to attend community college tuition-free in the 2019-2020 academic year.
Middle Class Tax Fairness: Highlighting unfair federal tax policies by the Trump Administration on middle class New Jerseyans, the budget seeks to address this burden by applying the millionaire's tax enacted in FY 2019 to all millionaires and using those additional revenues for property tax relief.
The FY 2020 budget also projects $60 million from the future legalization of adult-use marijuana and $20 million from medical marijuana.
Under the constitution, the budget bill must be passed by the Legislature and signed by the Governor by June 30.
Legislative Leaders' Response
Acknowledging the improved tone at the start of the negotiations, and lauding the Administration for its $1.1 billion in savings, Senate and Assembly Democratic Leaders generally gave a positive review of the Governor’s budget address, but maintaining their opposition to the millionaire’s tax proposal.
"This is a positive budget plan that takes meaningful steps in the right direction, but I remain opposed to the proposed tax increase,” said Senate President Steve Sweeney.
Assembly Speaker Craig Coughlin added, "I believe the Governor's proposal is an encouraging first step and I appreciate his efforts to achieve sustainable savings. However, I remain convinced that we can achieve added substantial savings through reforms and that our fiscal solutions should not include any broad-based tax increase, including sales and income tax."
The legislature will soon commence a department-by-department review of the Governor’s budget proposal that will last into May.