The dust is settling on this year’s whirlwind budget process here in the great – and often chaotic – Garden State, as Gov. Phil Murphy signed a record $56.6 billion spending plan into law Friday evening.

Murphy and legislative leaders tout the budget and companion bills – passed and also signed into law June 28 – as a win for New Jersey that builds on a commitment to make the state the best place to live, work, raise a family and retire.

“With this budget, we are going to make life more affordable for more families,” said Murphy. “We are going to create new economic opportunities for our workers and local businesses. And we are going to invest in the potential of every one of our neighbors – from our students to our senior citizens.”

Some topline items include:

• More than $3.6 billion in direct property tax relief, including the third year of ANCHOR program, Senior Freeze band over $200 million to pre-fund Stay NJ
• The full phase-in of the school aid formula (nearly $12 billion total)
• A full pension payment of nearly $7.2 billion
• A surplus of $6.1 billion
• More than $290 million in aid to community colleges
• The establishment of the controversial corporate transit fee (CTF) to serve as a dedicated funding source for NJ Transit
• $65 million for NJEDA to purchase certain properties from New Jersey Transit to maximize development potential (Senate Bill 3519/Assembly Bill 4709)
• $40 million for the state match for a federal electric grid modernization program
• Investments for initiatives to advance the AI Moonshot innovation economy as well as continued funding for the Main Street Recovery Program and the Manufacturing Initiatives and Strategic Innovation Centers

There is much more in the more than 370-page document, which NJBIZ will continue to dive into and analyze in the coming days and weeks.

Prioritizing ‘everyday New Jerseyans’

“Above all, this is a budget that will put the needs of our families ahead of special interests, starting by providing yet another round of record-high tax relief to our state’s working- and middle-class families,” said Murphy. “In fact, nearly half of this entire budget – more than $27 billion – will be dedicated toward providing direct and indirect property tax relief.”

“With a focus on our state’s most essential needs – affordability, education, mass transit infrastructure, and more – we are continuing to prioritize everyday New Jerseyans,” said Lt. Gov. Tahesha Way.

From establishing a new dedicated revenue stream for @NJTRANSIT to providing record school funding and property tax relief, our Fiscal Year 2025 Budget makes life more affordable for taxpayers while prioritizing critical long-term investments.

Learn More: https://t.co/EmTav7Kk9l pic.twitter.com/HNUnirweyp

— Governor Phil Murphy (@GovMurphy) June 29, 2024

“This budget invests in New Jerseyans at every stage of life, from record school funding for our children, to significant property tax relief for both homeowners and renters, to a historic contribution to the public pension system,” said State Treasurer Elizabeth Maher Muoio. “I would like to thank my staff at the Department of Treasury, particularly the hardworking teams at the Office of Management and Budget and the Office of Revenue and Economic Analysis for their tireless efforts behind the scenes to help deliver the state budget to the people of New Jersey.”

Living with the consequences

As NJBIZ reported, there were a number of criticisms about and opposition of the budget from Republican lawmakers and the business community, among others. Opponents pointed to everything from the CTF to the overall record spending number; the state’s structural deficit; the last-minute add-ons, rushed final week process and lack of transparency; schools losing funding; and more.

“The budget battle is over. We now have to live with the consequences,” said Tom Bracken, president and CEO, New Jersey Chamber of Commerce, continuing, “We are hoping that all the constructive dialogue we have had with the administration and the Legislature over the past months will open the door for more productive discussions in regard to our economy – and support for the business community.”

“We respectfully ask our leaders – once and for all – to seek more pro-business policies, rather than continually seeking to be an extreme national outlier in our taxes, costs, and regulations,” said New Jersey Business & Industry Association President and CEO Michele Siekerka. “As always, we stand ready to work with them to bring that much-needed balance to business, rather than just tipping the scales in a direction that dissuades prosperity. We need to do better for business.”

“Throughout the FY 2025 budget process, Republicans presented numerous proposals to improve both the process and our state’s affordability crisis – yet we were consistently denied a seat at the table,” Senate Republican Leader Anthony Bucco, R-25th District, in a statement on behalf of the Senate GOP. “As this budget imposes additional taxes, fees, and fare increases on our residents that will undoubtedly raise the cost of living and make the Garden State more unaffordable, no one can point the finger at Republicans – this is solely on the shoulders of our Democratic colleagues.”

Stand by your plan

But Democrats stand by the spending plan.

“This budget makes historic investments in schools, sustained property tax relief, health care, and transportation – all while maintaining our commitment to fiscal responsibility,” said Assembly Speaker Craig Coughlin, D-19th District.

“We are putting in place a fiscally responsible state budget that addresses the needs and priorities of the people of New Jersey,” said Senate President Nick Scutari, D-22nd District; Senate Majority Leader Teresa Ruize, D-29th District; and Senate Budget Committee Chairman Paul Sarlo, D-36th District, in a joint statement. “It meets the state’s obligations and supports the initiatives that will move the state forward and improve the quality of life for all New Jerseyans.”

During a Friday press conference following its passage, Murphy explained that this budget has several aims. He made a point to note the surplus, the full pension payment and full school funding.

“We’re making up for awful behavior before we got here, particularly in pensions, and secondly, in school funding,” said Murphy.

“Secondly, we are coming out of a pandemic,” he continued. “So, we are deliberately trying to put chum in the water to grow this economy and get it on a higher trajectory. I think the revenue trend that you’ve seen heretofore is not reflective of the revenue trend that you’re going to see going forward. So, this is not just about what we do with our expenses – but also the excitement, I think, we all share in the future of the state. So, stay tuned on that front.”