Lawmakers advance $50.6 billion budget, setting final vote
Committees from both houses of the legislature approved a $50.6 billion spending bill late Monday, preparing the record spending plan for votes in both houses of the legislature on Wednesday.
Gov. Phil Murphy is expected to sign the 277-page budget on Thursday, the deadline to avoid a state shutdown that would be embarrassing and politically damaging to him and the Democrats who control both legislative houses.
“The bottom line is that this budget is something we can be proud of no matter which side of the aisle you’re on, because every New Jersey resident will benefit from this $6 billion surplus, not just this budget, but future budgets,” said MK Benjie Wimberly (D-Passaic).
Passage of the bill was delayed for hours as lawmakers waited for a completed draft, which came nearly eight hours after the Senate Budget Committee’s scheduled start time and more than nine hours after the start of the hearing of the budget committee of the Assembly.
The headliner of the budget is the ANCHOR Property Tax Relief Program, a $2 billion replacement for the popular Homestead Benefit Program. State officials say ANCHOR will offer a $1,500 property tax credit to New Jersey homeowners earning no more than $150,000 a year, with a $1,000 credit for those earning between 150 $000 and $250,000.
Tenants with incomes under $150,000 can expect annual tax refunds of $450 under the program. The average benefit under Homestead was $627, and those awards went to a smaller group of homeowners.
The budget also includes a recently announced sales tax holiday is expected to cost the state approximately $75 million in lost collections. Senate Speaker Nicholas Scutari (D-Union) said last week that the 10-day tax holiday was intended to help consumers struggling with higher prices.
Republicans said both programs returned too little to taxpayers.
“We would give back a lot more of that money. I appreciate the suggestion that the ANCHOR program is substantial, but it’s not,” said Sen. Declan O’Scanlon, the house’s Republican budget director, shortly before the panel’s budget vote. . “Nobody would see anything for almost a year. It would be around this time next year.
Earlier Monday, Republicans made an unsuccessful attempt to move their own tax relief measures, which include $4.5 billion in one-time tax refunds and several permanent tax increases.
The budget’s headline numbers represent a sizable increase over the total spending Murphy proposed in his budget speech in March, when he launched just under $49 billion in spending.
But even amid growing spending, the state will see a larger surplus than the governor has proposed. New Jersey will put about $6.3 billion into reserves this fiscal year, up from $4.2 billion proposed by the governor in March.
Lawmakers intend to leave $4.2 billion for the State Debt Reimbursement and Prevention Fund, Sen. Paul Sarlo said. The fund is used to pay off existing debt to save state money on interest and to directly finance capital projects, waiving the need for future borrowing. The fund will be filled with state money and federal aid.
The budget earmarks nearly $1.8 billion in federal aid to the U.S. bailout for capital projects in the state, including $300 million each for Rutgers University and water main replacements $170 million for lead paint remediation and $120 million for Schools Development Authority capital projects.
Separately, the budget deposits $305 million in federal dollars into the state’s Affordable Housing Production Fund. This fund will finance the construction of new affordable housing to help municipalities meet the obligations set by the courts.
The spending bill includes about $12.7 billion in direct aid to schools, including about $1.5 billion in special education aid. Sarlo said the focus on tax relief by Murphy and lawmakers has kept them from reaching full school funding levels.
“The ANCHOR program is a $2 billion property tax program, so ultimately we couldn’t do it all,” he said.
Last year, Murphy and lawmakers agreed that the legislature The Joint Budget Oversight Committee would approve the use of federal funds. This panel will be rretain some control over state spending on federal aid for the coming fiscal year, but new language replaces the approval process put in place in 2021.
Under the new system, the governor must submit funding requests to the joint committee, which must meet to review them within 45 days. If they don’t meet, the request will automatically be approved, Sarlo said, adding that the Senate budget committee will hold oversight hearings on the spending of federal funds.
Alongside the budget, lawmakers on Monday approved the creation of a state-level child tax credit. Championed by progressive advocates, the program would give residents a tax credit of up to $500 per child, with adjustments based on income. The price is at its maximum level for those who earn $30,000 and decreases by $100 for every $10,000 of income above $30,000.
“We are under no illusions that this credit alone will end child poverty, but this commitment will go a long way to eligible working-class and middle-class families,” said Nicole Rodriguez, president of New Jersey Policy Perspective, a progressive think tank. tank who advocated for politics. “This credit can also be expanded and developed in the years to come, which we think lawmakers will do once they see its success.”
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