Murphy unveils $53.1B FY2024 budget proposal

During his annual Budget Address Feb. 28 in Trenton, Gov. Phil Murphy introduced a $53.1 billion Fiscal Year 2024 spending plan that includes a few notable headlines.

On the heels of January’s State of the State Address, laying out his vision to build the “Next New Jersey,” Murphy’s speech Tuesday expanded on that idea by establishing the three pillars needed to accomplish that vision: affordability, responsibility and opportunity.

“This budget is purpose-built to help our residents find their place in the Next New Jersey by securing their place in the New Jersey of right now,” said Murphy in his speech. “It is focused on our families’ pocketbooks to make New Jersey more affordable. And this budget is also designed to build an even greater confidence in our financial direction and in our ability to honestly meet our obligations.”

Among the toplines of the proposed FY2024 budget are:

• A proposed $10 billion surplus
• Following through on the sunset of the temporary Corporate Business Tax (CBT) surcharge in December 2023
• $200 million to address rising health benefit costs for local governments
• $100 million to launch the proposed Boardwalk Fund, first mentioned during State of the State
• More than $50 million in new resources to grow the green economy, including a $40 million Green Fund that will be run by the NJEDA and able to leverage both private capital and federal funds
• $50 million in continued support for the Main Street Recovery Program
• An additional $2.35 billion FY 2023 deposit in the Debt Defeasance and Prevention fund, for a total investment of more than $11 billion in the fund with the FY 2024 contribution
• Another $2 billion for the ANCHOR Property Tax Relief Program
• 18 tax cuts targeted toward middle- and working-class families, such as increased local property tax deductions, increased Earned Income Tax Credits, expanded eligibility through ANCHOR, and more
• A third straight year making a full pension payment, with a proposed $7.09 billion contribution
• No fare increases for NJ Transit for the sixth straight year

The ambitious plan comes amid myriad of economic headwinds and with less federal funds flowing as we continue to emerge from the pandemic. During a budget briefing ahead of the governor’s speech, administration officials acknowledged a potential economic slowdown and noted that revenues are stabilizing.

Officials noted that revenue growth for the first six months of FY2023 exceeded expectations, but several metrics show a deceleration. More broadly, economists continue to have varying opinions about a potential recession. Administration officials are hopeful that one can be “skirted,” with growth slowing but not turning negative, and believe that after a few quarters of lower growth things would uptick again in 2024.

The officials stressed that these realities make that massive $10 billion surplus critical to serve as a potential backstop in the event of, say, a recession, along with efforts to reduce the state’s debt service through the Debt and Defeasance Prevention fund.

“We have reduced our bonded debt. We’ve been building our surplus so that it’s at a level that provides the ability to get through tough times, which we’ve now all experienced over the past few years,” said State Treasurer Elizabeth Maher Muoio. “And it has not been easy. The governor will be the first to say that. But it was important because none of the rest of the priorities can be achieved if it’s built on a shaky financial foundation.”

“None of us hopes for an economic downturn. But should one occur, we will be on a far stronger footing to react in real time to ensure that critical investments can continue, that our economy can be backstopped, and that vital safety nets can be quickly put up so no one falls through the cracks,” said Murphy. “This kind of rainy-day thinking had previously been absent in Trenton. It’s why, during past recessions, we were slow to react and even slower to recover.”

The Next New Jersey isn’t some far-off vision. The Next New Jersey is here and happening right now.

The governor nodded to current economic challenges in his address as he elaborated on the Next New Jersey theme.

“The Next New Jersey isn’t some far-off vision. The Next New Jersey is here and happening right now,” Murphy noted in his speech. “At the same time, I know some of you don’t feel certain of your place in that Next New Jersey. First it was the pandemic and now it is inflation. You’ve been paying more for everything from gas to groceries, and your paycheck hasn’t kept up. It has been tough on your finances and your mental health.”

Murphy said the goal of this budget was to make sure everyone has a place in that Next New Jersey. He closed out the address adding, again, that everything in this spending plan is about growing and strengthening the middle class and providing more opportunity and more affordability for hardworking families.

“That is why this budget I present to the people of our state has more tax relief, more help for businesses to grow and create good-paying jobs, more investments to build a green economy and fight climate change,” said Murphy.

“Let us join together as we shape this next budget and commit to this – the Next New Jersey is where opportunity grows, where rights are protected, and where we fight for each other, not with each other,” he closed. “And most of all, let us continue making New Jersey the state where hard work pays off.”

There is, of course, much more in the budget plan.

Stay with NJBIZ for continued coverage, including more excerpts and details from Murphy’s speech, further analysis of what the spending plan entails, and reaction from the business community, legislative leaders and key stakeholders around the Garden State.