New Jersey lawmakers are expected to give final approval Tuesday to a record-setting $60.7 billion state budget, clearing the way for Governor Mikie Sherrill to sign the spending plan before the start of the new fiscal year on July 1 and avoid a government shutdown.
The budget increases funding for direct property tax relief, K-12 public schools, and temporarily expands the state’s child tax credit. It also fully funds New Jersey’s annual pension obligation.
The spending plan marks the first time New Jersey’s annual budget has exceeded $60 billion. Despite efforts to reduce the state’s structural budget deficit, the budget once again spends more than the state expects to collect in revenue, with surplus funds being used to bridge the gap.
To help reduce long-term costs, the budget significantly overhauls the Stay NJ property tax relief program. The income eligibility cap for senior homeowners will be reduced from $500,000 to $200,000, and benefits will be distributed on a tiered basis depending on income.
The budget also includes several business tax changes designed to generate hundreds of millions of dollars in additional revenue. Democratic leaders say the measures do not increase major taxes paid by residents, such as the state income or sales tax, while Republicans have criticized them as disguised tax hikes.
Funding for K-12 public schools will increase to more than $12 billion, while state support for NJ Transit also rises, although not enough to prevent a planned fare increase.
One notable omission is the restoration of cost-of-living adjustments for retired public workers, which remain frozen despite calls from retiree groups to reinstate them.
The budget agreement was reached following negotiations between Governor Sherrill and Democratic legislative leaders. Critics have again raised concerns over the lack of transparency surrounding the budget process, noting that many details were not made public until just days before the constitutional deadline.
The Legislature is expected to vote on the budget Tuesday, with Sherrill anticipated to sign it shortly thereafter.
