TRENTON, NJ — Governor Phil Murphy signed a $54.3 billion budget for New Jersey on Friday night — hours before the deadline — capping a chaotic week in the process.
Murphy signed the new spending plan alongside a massive new property tax relief package for seniors, led by Assembly Speaker Craig Coughlin.
The budget is $1.2 billion more than Murphy originally proposed in the Legislative Assembly.
Key to the budget negotiations was the creation of the new property tax relief program for seniors, dubbed StayNJ. The plan will provide tax credits equal to half of a senior’s property tax bill up to $6,500 on incomes up to $500,000. Program benefits will not be paid until January 2026.
Lawmakers — all of whom are vying for the November election — were eager to frame the budget from an affordability lens.
“When I took office, in partnership with the speaker, [we] we made sure that every decision we made was tied to affordability,” Senate Speaker Nick Scutari said at a press conference. “We don’t need polling data to know that taxes are generally the number one issue. This budget reflects those important moral values.”
The signing of the budget concluded a chaotic week in the process. Although Murphy and Democratic lawmakers reached an agreement well before the June 30 deadline, Democratic lawmakers brought forward the budget bill — which was not made public at the time — late Wednesday night to meet procedural deadlines. Democrats advanced the budget with initially flawed summaries and banned public comment.
The budget bill passed the Senate and Assembly earlier Friday with some bipartisan support. Three GOP state senators and six GOP Assembly members voted in favor of the measure.
The budget includes the doubling of the child tax credit and the third consecutive payment of a full pension, worth about $7 billion.
It also included an $8.3 billion surplus, which kept it flat. Murphy had proposed raising it to $10 billion to cushion the expected economic downturn; it’s unclear why he and lawmakers haven’t added more savings.
The spending plan did not include an extension of the corporate tax surtax – an additional 2.5% tax for businesses with taxable income over $1 million – which is set to expire at the end of the year. Lawmakers could still exercise the option to extend it later this legislative session.
The budget spends $892 million in federal pandemic relief funds. Murphy can also spend an additional $100 million without legislative approval.
The budget also sets aside about $2 billion for the ANCHOR property tax relief program, which provides refunds to landlords and renters. As part of Murphy’s deal with legislative Democrats, seniors will receive an additional $250 in ANCHOR benefits.
The StayNJ property tax relief plan had emerged as one of the most contentious parts of the budget negotiations, as Coughlin initially offered it with no income caps or credits worth half a dollar. property tax bill for seniors up to $10,000. The governor’s office initially anticipated a potential shutdown, citing cost and fairness concerns. But the end product included eligibility thresholds, lower benefits, and more money for renters.
Murphy defended keeping the additional $1.2 billion from the Legislature. He described it in terms he often uses.
“There are some amazing investments going on,” Murphy said. “It’s a compromise. We go back and forth. But it’s literally a game-changing budget and I can’t say enough good things about it.”