On Tuesday, February 25, 2020, Governor Phil Murphy delivered his third budget address at the statehouse in Trenton. Fiscal year 2021’s budget was built around the slogan: “Building On Our Progress”, to highlight the plans for continuing the progress that the Administration has made for the past two years. The budget features plans for maintaining fiscal responsibility, improving affordability and stabilizing property taxes, growing the economy, and investing in New Jersey’s future. Here’s a recap of what you need to know about Governor Murphy’s budget for each of these subjects:
Maintaining fiscal responsibility
In 2021’s budget plan, maintaining fiscal responsibility involves building up New Jersey’s surplus, doing more for the pension system, pursuing savings opportunities, and reducing non-recurring revenues.
The budget includes a deposit into the Surplus Revenue Fund, with projected surplus totaling $1.6 billion.
Governor Murphy also proposed making a $4.6 billion pension payment, a nearly 13 percent increase over 2020’s budget.
Murphy included nearly $400 million in departmental savings and $174 million in health benefits savings.
The plan reduces non-recurring resources to 0.8 percent of the budget.
Improving affordability and stabilizing property taxes
The new budget plans to continue to tackle New Jersey’s property taxes by providing additional funding for public education, lowering the cost of health care, and applying the millionaire’s tax.
Strengthening public education, expanding pre-K education, and transforming higher education are all featured in 2021’s budget. It includes an additional $336.5 million for K-12 education formula aid and $50 million in Stabilization Aid. Murphy proposes an additional $83 million in new spending to expand pre-K education. As for higher education, the Garden State Guarantee is introduced in this budget. This would add over $50 million of new funds to the outcomes-based funding formula so that four-year public colleges and universities can provide two years of free tuition to students with household incomes of less than $65,000
The budget funds the Governor’s new Office of Health Care Affordability and Transparency, which is aimed to help consumers and create health care savings. Murphy also proposed creating a state-level health insurer assessment to reclaim revenue previously sent to the federal government.
The Governor proposes applying the millionaire’s tax enacted in FY2019 to all income above $1 million, not just income over $5 million.
Growing the economy
The Governor’s budget makes new investments in workforce development, NJ TRANSIT, and water infrastructure.
The Department of Labor and Workforce Development will allocate over $20 million to advance Murphy’s Jobs NJ plan. This plan is aimed at both expanding opportunities for career seekers and ensuring that employers have access to the talent they require.
The plan will fast track NJ TRANSIT improvements with a General Fund subsidy of approximately $600 million. This will support the agency’s daily operations and allow for enhancements, new hiring, and a Battery Electric Bus program to advance clean energy goals.
The budget proposes an $80 million appropriation to the Drinking Water Program to ensure safe and modern water infrastructure.
Investing in New Jersey’s future
The budget plans to invest in New Jersey’s future by supporting working families, continuing to fight the opioid epidemic, and criminal justice reform.
The budget proposes nearly $20 million for family planning services and advances the First Lady’s Nurture NJ program to reduce maternal mortality rate and ensure equitable maternal and infant care.
The Governor is staying consistent with a $100 million commitment to fighting the opioid epidemic through carefully designed programs and data-driven analysis.
The budget aims to reform New Jersey’s criminal justice system. It includes almost $30 million in implementation funds for Earn Your Way Out and Hepatitis C treatment. It also includes funds for transitional housing and job training