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The basics:

• Final NJ budget vote pushed to Friday night amid delays
• $58B deal includes full pension, school, and property tax relief
• Over $1B in tax/fee hikes include gaming, tobacco, real estate
• Critics warn of structural deficit, lack of transparency

As Tom Petty sang, “the waiting is the hardest part.”

Despite a negotiated budget agreement reached earlier this week between Gov. Phil Murphy and legislative leaders – Senate President Nick Scutari, D-22nd District, and Assembly Speaker Craig Coughlin, D-19th District – the process has been again marred by the last-minute nature of the spending bill’s actual passage and language.

The outcome of the vote is not in question whatsoever — and there is no virtually no risk of a shutdown before July 1. But yet again, here we are in New Jersey, up against the deadline clock.

The negotiated agreement confirmed by the governor and leadership contains much of what was in the governor’s budget proposal – but with tweaks. The changes eliminate some of the proposed “fun” tax increases while still keeping some more than $1 billion in fee and tax increases on items such as internet gaming and sports betting, as well as a hike on cigarettes and vaping liquid, and realty transfer fees on homes more than $1 million.

The budget plan will maintain a full pension payment, full school funding formula, property relief programs including ANCHOR and StayNJ, and a $6 billion surplus.

The negotiations also resulted in an agreement to cut $100 million in state worker health care costs – with an insurance spike on the way. But the actual, full budget bill remains AWOL (as of this writing Thursday evening). The governor’s proposal had a topline number of $58 billion.

Friday night plans

Thursday kicked off in Trenton with Senate Budget Committee Chairman Paul Sarlo, D-36th District, noting that staffers were still physically putting together the bill. He added the measure was not expected to drop until evening, at the earliest.

As the evening arrived, Sarlo gave word that the legislation would not be ready until Friday. That left the committee to vote on other key items and adjacent bills; but then return Friday evening to vote on the budget bill itself.

“That bill, now we have confirmed with the Office of Legislative Services, to ensure that all language and score sheets are properly scored, will not be available until tomorrow,” Sarlo announced. “We’re not going to take a chance. This committee will remain open – if any members, unfortunately, because weren’t aware, need to leave their yes vote or no vote; you’re able to do that.

“Members who are available will come in and vote on that tomorrow night – around 8:00 p.m.”

After debating and voting on a number of bills, an interesting exchange occurred between the two top-ranking members from each party serving on the Senate Budget Committee as the hearing was winding down.

“Look, we do disagree sometimes, but this a committee with the greatest camaraderie – with all due respect to other committees I’m on,” said Senate Republican Budget Officer Declan O’Scanlon, R-13th District. “You [Sarlo] really do a good job and you run meeting very fairly. And in that part of the process, we appreciate it.”

Back and forth

“But look, this overall process none of us is happy with,” O’Scanlon added. “If you’ve got something you want to release in the dark of night when no one’s paying attention, everybody knows you put it after 4:30 p.m. on a Friday in the summer. When is this budget going to be seen – 8:00 at night on a Friday? And it’s been a moving target. We’ve moved this now three times. I’ve moved my schedule all over the place – Chairman, you’ve moved yours.

“A lot of us can’t be here tomorrow night. That’s just not a way to run a railroad,” O’Scanlon continued. “Guys, this is just not acceptable. It would be easy for us to say – two weeks before the July 1 deadline, the budget is set. And a week before – we’re voting. It would be easy to do that, if there were not chaos somewhere amongst these ranks – and some discipline. Chairman, you would inflict that discipline.”

Sarlo responded, “I have been here under Republican governors and I’ve been here under Democratic governors. And nothing has changed – because that June 30 deadline is the last day. Nobody wants to flinch or make a decision.”

“I’ve been here under both, too – and I’m an equal opportunity attacker,” said O’Scanlon. “I’ve complained, too.”

O’Scanlon said this process should not play out like this.

“Other states seem to get it done in a way that it doesn’t seem like it’s happening in the dark of night,” said O’Scanlon. “Tomorrow, it will literally be the dark of night.”

“And listen, who knows what’s going to happen on the federal government level,” said Sarlo. “They’re going to pass it [the Trump administration’s ‘big, beautiful bill’] on July 4.”

Dollars and sense

“And I’ll complain about that, too,” said O’Scanlon. “The public should be part of this. And should know exactly what’s happening.”

This timing would set up a full Assembly and Senate vote Monday. Then the governor would sign the bill ahead of the midnight July 1 deadline.

“Even when we vote on this on Monday, most people aren’t going to know what’s really in this,” said O’Scanlon. “We know overall – and Republicans know overall because a lot of it is going to be very close to what the governor predicted. We’ve spoken about some of that.”

The public should be part of this. And should know exactly what’s happening.
– Declan O’Scanlon, R-13th District

Sarlo countered, “I think, in all fairness, the GBM (Governor’s Budget Message) has not changed much. The overall budget hasn’t changed – the full dollar amount. The $6 billion surplus hasn’t changed. Today, we talked about three or four key items that are part of it.

“Yes, there is some supplemental funding – some things that are being restored that were cut; higher education and other pieces, hospitals – that had support.”

O’Scanlon added, “But overall, this budget – if you really read between-the-lines, and you know about the spend-down of surplus; and you know the timebomb that Stay New Jersey is. And you know that we’re spending down the last COVID money, the last penny this year – and the last debt defeasance money. It’s about a $3 billion to $4 billion structural deficit. It’s falling like a ticking time bomb into the lap of the next governor – whoever he or she may be.”

“They are getting off to a good start with a $6 billion surplus,” said Sarlo.

“I’d rather have a $3 billion surplus and a balanced budget than a $6 billion surplus and a $3 billion to $4 billion deficit,” said O’Scanlon.

Process improvements

“I don’t know about that. It does give the next governor a lot of leeway on how they want to govern and operate,” said Sarlo. “They hit the ground. Many governors have left other governors in the red – with no surplus.”

“But with budgets that were close to being balanced,” said O’Scanlon. “This one is one of the most out-of-balance that will be left to the next administration. But regardless, it’s a long night – thanks everyone for all your hard work; staff and you, chairman, for running great meetings.”

“We could sit here and debate,” said Sarlo. “I’ve seen them all – but I pledge to everybody I will continue to do my best to improve the process. Unfortunately, when you are in this environment, there’s a lot of people that you need to bring along – and get consensus. And it makes it a little more difficult.”

Things remain in a holding pattern until Friday evening in Trenton, which would then set the stage for the final stretch Monday.

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