Democratic Governor Phil Murphy has signed the $32.7 billion Fiscal Year 2021 Appropriations Act (budget) into law.
In a press release, Murphy said the revised state spending plan “manages to protect core priorities and deliver middle class tax relief during the historic fiscal crisis caused by the COVID-19 pandemic.”
The budget fully re-establishes the millionaire’s tax that expired in 2010, instituting the existing 10.75% rate on income over $5 million to income earned over $1 million, according to the press release.
The budget also relies on the ability to issue up to $4.5 billion in general obligation bonds to help address the economic fallout created by COVID-19 and better position the state to weather any future public health and economic uncertainties, according to the press release.
Murphy originally laid out his 2021 budget proposal on Feb. 25. Less than two weeks later, the COVID-19 pandemic took root, ravaging New Jersey from a public health standpoint and an economic standpoint, according to the press release.
The crisis prompted state officials to follow the federal government in moving important April tax filing deadlines to July and extending the fiscal year from the traditional June 30 end date to Sept. 30. As a result, the budget signed by Murphy on Sept. 29 addresses spending from Oct. 1, 2020, through June 30, 2021.
State Senate President Steve Sweeney (D-Gloucester) was quoted in the press release from the governor’s office as saying, “Our budget restores cuts and makes the investments we need in our state and county colleges, in Extraordinary Special Education Aid for our most vulnerable students, in our hospitals and direct care workers who provide critical healthcare, and in a wide range of other services that are more important than ever in this pandemic.”
According to the governor, the budget maintains funding for critical programs, including K-12 education, municipal aid, direct property tax relief (including the Homestead Benefit and the Senior Freeze), the Child and Dependent Care Tax Credit, and post-secondary tuition assistance.
Republicans had a different view of the Fiscal Year 2021 budget Murphy signed.
Doug Steinhardt, the chairman of the state Republican Party, said, “With this budget, Gov. Murphy might as well be signing a letter addressed to every New Jersey taxpayer that reads ‘Move to Florida or Pennsylvania. I don’t care.’
“This $32.7 billion budget is the most callous and crippling in New Jersey history. In the middle of an economic crunch made worse by his decisions, Phil Murphy’s lack of understanding for struggling New Jersey businesses and families was never more evident,” Steinhardt said.
In one specific budget development, New Jersey’s horse racing industry will receive a multi-million dollar subsidy in 2021, but the financial support from the state will not be as large as was initially anticipated.
Republican state representatives reported several weeks ago that Murphy was planning to eliminate a $20 million subsidy the horse racing industry was scheduled to receive in the upcoming fiscal year.
On Sept. 30, Dennis Drazin, the chairman and CEO of Darby Development, LLC, the operators of Monmouth Park, Oceanport, said most of the subsidy would be provided to the horse racing industry.
“We are grateful to Gov. Murphy and the legislative leadership, the Senate president, the Assembly speaker and all the senators and assemblymen who supported protecting the horse racing industry by delivering a $15 million subsidy, thereby protecting 13,000 jobs and an (industry) that generates a significant economic contribution to New Jersey,” Drazin said.
New Jersey’s operating race tracks are Monmouth Park (thoroughbred racing), Freehold Raceway (harness racing) and the Meadowlands (harness and thoroughbred racing).
The budget Murphy signed includes funding for school based youth services programs, which previous published reports indicated was on the chopping block.
One youth services program that faced a loss of funding is The Source at Red Bank Regional High School, Little Silver.
When word got out several weeks ago that the governor was considering defunding these programs, supporters of The Source mounted a campaign to save what they said is an important and much needed service in the school.
In a message posted online after Murphy signed the Fiscal Year 2021 budget, directors of The Source addressed their supporters and wrote, “Your active participation yielded the outcome we so desired. Simply put, you changed our world.
“Whether you made a phone call, sent a testimonial or shared information on social media, you made this change. We are so grateful for your advocacy on our behalf.
“Thank you for your support, dedication and making the time to make a difference. As we enter into our 21st year of service, we assure you we will continue to meet the emerging needs of the students and school community at Red Bank Regional High School. We are pleased to say ‘The Source is Open,’ ” they wrote.
“We have contended from the beginning of this process that the excessive spending, borrowing and taxation found in this budget were, in fact, not necessary and not COVID-19 related. … With $215 billion in debt, a crushing business climate and a continued appetite to tax and spend, New Jersey simply cannot continue along this path.
The budget was met with approval from the Housing and Community Development Network of New Jersey, a statewide association of more than 250 community development corporations, individuals and other organizations that support the creation of affordable homes, economic opportunities and strong communities.
In a press release, President and CEO Staci Berger said, “The effects of the economically crippling health pandemic have devastated our families and will be felt for years to come.
“Tens of thousands of residents are dealing with the emotional and financial strain of housing instability; we applaud the renewed investment in the Affordable Housing Trust Fund to create the homes New Jersey’s residents and economy need. Housing is health and it’s been fundamental to stemming the spread of the virus.
“Gov. Murphy and New Jersey’s legislators had a monumental task of delivering a budget which puts our state on sound financial footing. They did this while emphasizing fairness, promoting economic security and keeping residents safely and stably housed.
“We are pleased to see this budget, which includes a millionaires tax, and other sensible solutions, signed by the governor so we can create the healthy and affordable communities necessary to build a thriving New Jersey,” Berger said.