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In his 2025 Budget Address, Gov. Phil Murphy laid out a record $55.9 billion budget proposal that he says is crafted for the working and middle-class families of the Garden State.

“We all depend on the working New Jerseyans who have had our backs during hard times and who deserve leaders who have their backs, too,” said Murphy. “It is a budget that delivers on the promises we have made to the people of New Jersey since day one. A budget that will make life more affordable for more families — by lowering costs and increasing opportunities. A budget that balances the responsibility of spending within our means — while stretching every dollar to lift up our neighbors in need.”

The address – Murphy’s seventh – comes at a time of great global geopolitical uncertainty, with no shortage of challenges here in the Garden State and beyond.

“Today, we live in a world embroiled in disruption. A world that has been jolted by inflation, supply chain snarls, two full-on wars, climate change — and so much more. And while all of these challenges are global in scale, in many ways, they hit our families – here at home – the hardest. Most importantly, in the form of higher costs and heightened anxieties,” Murphy opened the speech. “So at a time when those at the very top are doing better than ever, many of our families are struggling just to afford basic necessities. Groceries. Diapers. Clothes. Car repairs. On and on.

“The fact is, right now, millions of families across New Jersey – indeed, across America – are making tough decisions about where to cut costs and how to save more money at the end of month,” he continued. “And frankly, those kitchen table conversations are no different than the conversations we are having, right here in Trenton.”

Noting this moment of economic uncertainty and unease, Murphy asked how we move forward as a state.

‘The good news’

“Well, here is the good news: we are prepared to meet this moment. New Jersey is prepared to face our challenges — confidently, capably, and ambitiously,” Murphy declared. “And we are prepared, because over the past six plus years – together – we have restored fiscal responsibility while remaining true to our values.”

As administration officials stressed in pre-address briefings with reporters, at the top, this budget continues funding for key priorities, such as affordability. It also targets strategic areas of investment while maintaining the fiscal responsibility that has led to a string of credit ratings upgrades as well as a big surplus.

Notable toplines of the proposed FY 2025 plan include:

• $6.1 billion projected surplus
• More than $2 billion in funding to continue the ANCHOR property tax relief program
• Expansion of Senior Freeze and $200 million to pre-fund the StayNJ property tax relief program
• Fully funding the S2 school formula, making Murphy the first governor to do so, as well as marking the single-largest investment in the state’s K-12 schools with $11.7 billion altogether for public education
• A fourth consecutive full pension payment with a proposed $7.16 billion contribution for FY25
• A series of initiatives to address critical workforce needs
• $120 million to finish the State Police Training Center
• $70 million to support state parks (from Debt Defeasance and Prevention Fund)
• $21 million to convert veterans’ home rooms to single occupancy
• A suite of initiatives to advance the AI moonshot and build upon the forthcoming AI Hub at Princeton University
• Continued support for programs such as the Main Street Recovery Funds, Manufacturing Initiatives and Strategic Innovation Center, altogether bringing the total investment to the trio to more than half a billion dollars over the last five years
• $40 million in state matching funds for electric grid modernization work
• And much more

“Simply put: our budget will ensure that New Jersey retains its proud reputation as the best place, anywhere in America, to raise a family,” said Murphy. “And that vision applies to every family. Especially those who feel as if they have been forgotten.”

Fixing NJ Transit

Meanwhile, one major item introduced in the budget plan is sure to incite the business community.

NJBIZ has reported about both NJ Transit’s budget woes as well as the sunset of the corporate business tax (CBT) surcharge. The business community lobbied hard to eliminate the latter and applauded Murphy for following through on its conclusion. However, in recent weeks and months, some lawmakers and advocate groups have pushed for the CBT’s reinstatement to fund NJ Transit. Murphy has rebuffed the notion.

On Tuesday, he introduced the Corporate Transit Fee.

Corporations in New Jersey with net incomes above $10 million will pay the 2.5% surcharge. According to administration officials, the CTF would impact some 600 corporations.

“Our promise was to fix NJ Transit so it can become the world-class transportation system we need it to be. And with our budget, we are going to build on our progress in fixing NJ TRANSIT in a way that is consistent with our vision for a stronger and fairer New Jersey,” said Murphy. “Today, we are proposing a Corporate Transit Fee. It will provide a dedicated funding stream for NJ Transit — at no additional cost to our working families. With the Corporate Transit Fee, we are going to ask the biggest corporations … to support NJ Transit’s future. And we will raise this revenue without placing any new burdens on small- and medium-sized businesses. In fact, nearly 2,500 companies will see their taxes decrease from last year.”

Our promise was to fix NJ Transit so it can become the world-class transportation system we need it to be.
– Gov. Phil Murphy

“And let me take this opportunity to thank, in advance, the big companies which will be stepping up,” Murphy continued. “Many of them have partnered with our Administration since day one — and they have been essential in getting our economy back on its feet post-pandemic. But most importantly, let me also thank the hardworking commuters of New Jersey — who have always paid their fair share, and depend on our transit system every day. It is for them, first and foremost, we are fixing NJ Transit.”

‘Nothing good about it’

NJBIZ will have more on the Corporate Transit Fee, in particular, in forthcoming aftermath and reaction coverage to the address. Sure to ignite the business community, who fought for the sunset, those reactions are already pouring in.

“I hope this is a nightmare that isn’t true,” Tom Bracken, New Jersey Chamber of Commerce president and CEO, said in a statement. “The proposal to bring back the CBT surcharge does long-term harm to the state’s reputation and the economy. There’s nothing good about it. Our positive momentum will immediately pay the price since we will have the highest business tax in the nation. That’s a major step backwards.”

“Just two weeks ago, the governor was asked on ‘Ask the Governor’ if he was having second thoughts about sunsetting the Corporate Business Tax surtax that had earned New Jersey the highest CBT rate in the nation,” New Jersey Business & Industry Association President and CEO Michele Siekerka said in a statement, noting Murphy’s resistance in that interview to reimpose the fee and tying it to transit funding. “Yet, just days later, we are here with another new and unnecessary corporate business tax of a different name, returning New Jersey to its extreme outlier status for business taxes after seven weeks – retroactive to Jan. 1, to add insult to injury.”

As Murphy closed out, he touted the creation of a new generation of economic industries of the future, while maintaining fiscal responsibility and staying true to our values.

“So New Jersey is prepared for the challenges of tomorrow. We will invest in the potential of every New Jerseyan — from our students to our senior citizens,” said Murphy. “We will put more nurses in our hospitals, and more educators in our classrooms. And we will hand our kids a state that is better than we found it. We will hand them a New Jersey that is the best place anywhere to raise a family. A New Jersey that is stronger and fairer than ever before.”

Stay with NJBIZ for continued coverage, reaction and analysis from Gov. Phil Murphy’s Fiscal Year 2025 Budget Address.