On February 22, 2021, Governor Murphy presented his budget for Fiscal Year 2022 to the Legislature. The Governor proposed a $44.8 billion dollar budget with no increase in taxes. The spending proposal assumes 2.4 percent growth in total revenue and includes a surplus of $2.19 billion, just under five percent of budgeted appropriations. It calls for a $6.4 billion payment to the public employee pension fund, the first full payment into the fund since 1996.The Legislature will begin its review of the Governor’s proposed budget in March. Both houses must pass the budget and the Governor must sign it by July 1, 2021.
The proposed FY2022 budget includes $319 million in direct tax relief for middle-class families, which will provide up to a $500 rebate to over 760,000 couples and individuals with qualified dependents. The budget also includes $1.25 billion in funding to support various property tax relief programs. Additionally, it includes funding to expand the Veterans’ Property Tax Deduction to those who served in peacetime; to make the Child and Dependent Care Credit refundable and expand eligibility to families making up to $150,000 and expands eligibility for the Earned Income Tax Credit to roughly 70,000 senior citizens without dependents.
The proposed budget contains several healthcare related initiatives including an additional $25 million in NJ Health Plan Savings subsidies; launching the “Cover All Kids” initiative with the ultimate goal of ensuring affordable, accessible health coverage is available to nearly 88,000 children without coverage; raising the income threshold by $10,000 for the Pharmaceutical Assistance for the Aged and Disabled and Senior Gold programs; $19 million to support the new Reproductive Health Care Fund, which will cover costs for contraceptive, prenatal, labor, and delivery care for those without access to medical assistance; $19.5 million for Family Planning Services, $8.5 million to expand Medicaid coverage for 365 days postpartum and $2 million to create a new pilot program to support rental assistance for expecting mothers.
The proposed budget includes an increase of over $700 in education aid for New Jersey’s school districts, including an increase in funding for Pre-K programs. It allocates $50 million to fund The Garden State Guarantee, which provides two years of free tuition at four-year institutions for students with household incomes of less than $65,000, invests $27 million in the Community College Opportunity Grant program, which provides tuition-free community college for eligible students, an increase in funding for the Educational Opportunity Fund of $2.8 million and an increase in aid to community colleges of $5 million.
GROWING THE ECONOMY
The proposed budget also includes a new multi-departmental economic growth initiative, a roughly $200 million investment, that will boost economic recovery in New Jersey communities, provide access to capital for minority-owned businesses, and help government support sustainable economic growth.
It includes $20 million for the Housing and Mortgage Finance Agency’s Down Payment Assistance program, providing nearly 2,000 mortgages for first time homebuyers.