Gov. Phil Murphy and New Jersey’s Congressional delegation are pressing the Trump administration for a multibillion-dollar bailout for the state’s budget, as the coronavirus outbreak grinds the national economy to a halt and wreaks havoc on state budgets.
Murphy said Wednesday that he would seek block grants for New Jersey, which are federal dollars with far more flexibility in how they can be used, as opposed to aid for specific programs.
“History will be very unkind to our country and our state if we undershoot,” Murphy said. “There’s no amount of money in any state – New Jersey, New York, California, you name it – there’s no amount of money that can deal with the challenges, the economic challenges, that can come from this.”
The governor unveiled his $40.9 billion spending plan in February, but the unrest from the coronavirus has thrown much of that proposal into chaos. The state’s current budget has a $1.5 billion projected surplus, including a $401 million rainy day fund to ride out economic recessions.
All this economic activity makes up billions of dollars in tax revenue each year for the state budget.
“You can’t do what we have done and not have a dramatic impact on, not just people’s lives, but on the health of the state’s budget and revenues,” the governor said.
Senate President Stephen Sweeney, D-3rd District, proposed a two-month tax holiday on the sales tax and deferral on property taxes, while the state Assembly fast-tracked a one-month extension on the corporate business tax.
Most of those economic relief bills are slated for a Senate vote Thursday, but these taxes makeup billions of dollars in state revenue. The state constitution mandates that Murphy sign a state budget by midnight on June 30 or order a government shutdown.
The governor said he had a “constructive” call with the state’s Congressional delegation about getting those grants “as soon as possible.”
“That is the singular fastest and best way to shore up our finances,” he said.
Murphy said the financial status of New Jersey Transit amid the coronavirus outbreak was particularly worrisome—the decision for hundreds of thousands of commuters to work from home has taken a hit on the agency’s ridership and fare revenue.
Nationwide, state and local governments could need a combined $4 trillion from the federal government to plug these abruptly gaping holes in their budget, Murphy said, as Congress fastracks aid packages in the hundreds of billions of dollars for residents and businesses slammed by the outbreak.
On Wall Street, the COVID-19 panic has wiped away all the stock gains made since Donald Trump assumed the presidency in January 2017.
Editor’s note: A previous version of this article indicated that money collected from sales, property and corporate business taxes makeup hundreds of billions of dollars in state revenue; that was incorrect, it is billions of dollars. This story was updated at 9:34 a.m. EST on March 19, 2020 to reflect that change.