NJ Budget in Crisis

New Jersey lawmakers are scheduled to vote Monday on a spending plan that, despite deep cuts to programs and services, also earmarks more money for the overwhelmed unemployment system and public colleges and universities.

The $7.7 billion plan authorizes government spending for thee months, beginning July 1 through the end of September. Lawmakers typically would have to pass a 12-month budget by the end of June, but this year, they moved that deadline to the end of September citing the life-altering impact of coronavirus. They need to pass a stopgap spending plan in the meantime and send it to Gov. Phil Murphy to sign it into law.

For the first time in months lawmakers plan to return to the Statehouse in Trenton to cast their votes in person. They had been conducting business remotely and via teleconference during the height of the coronavirus pandemic.

Here’s what you need to know about the state’s spending bill.

What’s in the NJ budget

New Jersey’s unemployment systems repeatedly crashed under the weight of record-setting claims as businesses, restaurants and industries shut down because of coronavirus. Lawmakers want to spend an extra $4 million for the Department of Labor and Workforce Development to modernize the system and make it run quicker and smoother.

Public universities and county colleges will get another $52 million and $14 million in aid, respectively. New Jersey’s halls of higher education sent students home during the coronavirus pandemic and, like the state, are suffering financial losses. Rutgers instituted a hiring freeze and spending constraints in April, for example.

Lawmakers also stuck in language that allows Treasury officials to remove spending items — called de-appropriations in budget parlance — but only after giving a panel of lawmakers a chance to weigh in first.

What’s out 

There are no tax increases in this budget, as Murphy at least temporarily abandoned his prior push for higher income tax rates for millionaires and a fee on companies that don’t offer their employees affordable health care plans.

But reduced income means cuts totaling more than $4 billion across the board to state departments. 

Many cuts proposed by Murphy are enacted in the budget. Lawmakers will not restore funding for property tax payment programs including Homestead Benefit and Senior Freeze, which help more than 600,000 seniors and low-and-middle-income residents pay their bills each year.

What happens next

Murphy needs to sign off on the plan before Wednesday. Last week he acknowledged “a good amount of common ground and working relationships with both the Assembly and the Senate” on the bill, a signal he’s likely to sign the bill into law and avoid the drama of a potential government shutdown.

The governor could also line-item veto some items in the bill, removing specific items while allowing the rest of the bill to go into effect.

Once the bill is signed, the state’s financial minds in the Department of the Treasury will shift focus to a budget for the upcoming, 9-month fiscal year that begins in October.

That budget may include more drastic cuts to spending as the state continues to see the economic fallout of the virus. By law, Murphy must release his spending proposal by Aug. 25 and the Legislature must make changes and sign off by Sept. 30.