Murphy signs New Jersey's nearly $51 billion budget
New Jersey Democratic Gov. Phil Murphy, seated, signs the $50.6 billion fiscal year 2023 budget, Thursday, June 30, 2022, in Cranford, N.J. The bill sets aside $2 billion for property tax relief and carries a nearly $7 billion surplus into the new ye
CRANFORD, N.J. (AP) - Touting Democrats' stewardship of the state and warning of a potential downturn in the economy in the coming years, New Jersey Democratic Gov. Phil Murphy signed a record $50.6 billion budget that pours $2 billion into property tax relief, sets a record surplus and lifts overall spending 9% over last year.
Murphy signed the first spending plan of his second term Thursday alongside fellow Democratic legislative leaders in Cranford, a suburb with neatly kept yards and handsome single-family homes, just hours ahead of a constitutional deadline to enact a balanced budget.
The giveback to taxpayers reflects Democrats' desire to address what they and others call an "affordability crisis" in the state, whose property taxes top most states' and where typically low gas prices are teetering toward $5 a gallon. It comes just after Murphy's close electoral victory last year and amid Republican victories in the legislative races.
"The priorities of this budget are the priorities of our families — and at the top of that list right now is affordability," Murphy said.
The GOP derided the plan for not giving back more to taxpayers, and they tried to push through a tax giveback that dwarfed the Democrats' plan, but failed because they're in the minority in the Legislature.
New Jersey's Democrat-led Assembly debates the passage of the $50.6 billion fiscal year 2023 budget, which passed both houses, Thursday, June 29, 2022, in Trenton, N.J., and now heads to Democratic Gov. Phil Murphy's desk. (AP Photo/Mike Catalini)
The budget builds on a number of Murphy's campaign promises, including boosting school and public pension aid, as well as sustaining a nearly $7 billion surplus, more than $2 billion over where the current fiscal year's balance stood.
Acknowledging the economic headwinds facing the public, as well as his political party, Murphy cast New Jersey as a model to follow. The flush state coffers came as a result of higher-than-expected tax collections. Murphy and Democrats raised income tax rates on those making more than $1 million in his first term.
A former Wall Street executive, Murphy highlighted the surplus, which he said credit rating agencies look favorably on.
"This not only ensures we have the wherewithal to meet unexpected challenges in the years to come — and I think there will be many in our economy — but it is a clear sign to the rating agencies that we are serious about the years beyond that," Murphy said.
The Democrats placed a property tax break program at the center of their plan.
Under the budget, some 870,000 families that make up to $150,000 would get "direct relief" of $1,500; those earning from $150,000 to $250,000 will get $1,000 in credits, and for the first time ever, renters will also get assistance.
Those making up to $150,000 will get $450 in assistance. The program has a $2 billion price tag and will help an estimated 2 million households.
Also included in the budget is a yearlong halt of the state's $28 marriage license fee, along with the suspension of a number of motor vehicle fees. There's a $500-per-child tax credit for lower-income residents that phases down to $100 when income reaches $80,000 a year.
Murphy and the Democratic leaders of the Legislature agreed on a roughly $4 billion fund aimed at defraying state debts.
There's a sales tax holiday on school supplies that goes into effect in late August and early September.
The budget also includes billions in spending for K-12 education and higher education, transportation and the public pension.
New Jersey's annual average property tax rate of $9,300 is regularly among the highest in the country. Under the budget giveback, Murphy said the average rate will fall to about $7,800 for many families — a level not seen in a decade.
The taxes are levied by school districts and local governments and pay for educational and other services. They're reliably a political issue in New Jersey, which moved to cap annual property tax increases at 2% in 2010 under former Republican Gov. Chris Christie.
Among the provisions in the budget are:
- A property tax credit for homeowners with a rebate for renters. Some 870,000 families that make up to $150,000 would get "direct relief" of $1,500; those earning from $150,000 to $250,000 will get $1,000 in credits, and for the first time ever renters will also get assistance. Those making up to $150,000 will get $450 in assistance. The program has a $2 billion price tag and will help an estimated 2 million households.
- A year suspension of the state's $28 marriage license fee, along with the suspension of a number of motor vehicle fees.
- A $500 per child tax credit for lower-income residents that phases down to $100 when income reaches $80,000 a year.
- A roughly $4 billion fund aimed at defraying state debts.
- A sales tax holiday on school supplies in late August and early September.
- The budget also includes billions in spending for K-12 education and higher education, transportation and the public pension.