Legislature passes record-high $ 50.6 billion budget

Lawmakers in both chambers approved a $ 50.6 billion spending bill in votes almost entirely along partisan lines Wednesday, sending the measure to Gov. Phil Murphy’s desk where it is expected to be signed Thursday.

The unprecedented spending, fueled by tax collections that surged billions beyond expectations, comes with a record-high $ 6.3 billion surplus, a full $ 6.8 billion pension payment, and more than $ 2 billion in tax relief, most of which comes from the ANCHOR property tax relief programwhich supplants the popular homestead rebate program.

“I don’t want to get ahead of myself, but I think this is the single-greatest budget New Jersey is going to pass. The single greatest one,” said Senate President Nicholas Scutari (D-Union). “You can say what you wish… but this is the greatest property tax relief program in the history of New Jersey. ”

Sen. Vince Polistina (R-Atlantic) was the only Republican in the upper chamber to vote in favor of the budget. It passed the Senate 25-15. Polistina’s district mates, Assembly members Don Guardian and Claire Swift, both Atlantic County Republicans, crossed party lines in the lower chamber, which advanced the budget in a 47-30 vote.

The $ 2 billion ANCHOR program will provide $ 1,500 tax credits to homeowners making up to $ 150,000 annually. Those making between $ 150,000 and $ 250,000 will receive credits worth $ 1,000. The average homestead benefit was $ 627.

Under ANCHOR, renters making no more than $ 150,000 are eligible for $ 450 in tax refunds. Homestead awards were meted out only to homeowners.

ANCHOR awards won’t reach residents until the end of the tax filing season.

Lawmakers also approved a 10-day sales tax holiday 27. The holiday, which will exempt those items from New Jersey’s 6.6% sales tax in what Scutari said is a bid to help consumers deal with inflation, is expected to cost the state roughly $ 75 million in lost revenue.

The state expects to forgo another $ 60 million in revenue for a yearlong fee holiday for driver’s licenses, marriage licenses, state park entry fees, and certain professional licenses.

Republican Sen. Steve Oroho called one budget provision “smoke and mirrors.” (Daniella Heminghaus for New Jersey Monitor)

Republicans, who had attempted to forward their own tax relief package without success, railed against the proposals, warning the record level of spending would leave the state poorly prepared for an economic downturn and adding the relief the budget contains would take too long to reach tax payers or is too limited to be meaningful.

“The supposed tax breaks in this budget are a joke. They’re designed to sound like you’re providing relief but really slap taxpayers in the face,” said Sen. Declan O’Scanlon, the Senate’s Republican budget officer. ‘ll save 24 bucks if you’re one of the very lucky 25% of people renewing their driver’s licenses. Maybe you’ll save around 20 bucks if you shop for pencils and paper for school. ”

Other Republican lawmakers grumbled over what they deemed a partisan budget process, charging Democrats made no effort to include the minority party in discussions or consider its proposals.

The GOP caucuses had proposed $ 4.5 billion in one-time rebates coupled with permanent tax cuts, including a proposal that would index the state’s income tax brackets to inflation.

The budget will give a small boost to municipalities by taking energy tax receipts collected on behalf of local governments and returning them to towns Without adjustments for inflation, the $ 75 million returned to local governments accounts for about 22% of the $ 331 million in energy taxes that have been diverted to the state budget annually since 2011.

“This is completely smoke and mirrors. Seventy-five million, and everybody says,’Oh, that’s terrific,’” said Sen. Steve Oroho (R-Sussex), the chamber’s GOP leader. you do next year? We said make it permanent and give it back where it was supposed to be always, with the municipalities. ”

It’s not clear whether the partial restoration will continue in future years, though the New Jersey League of Municipalities and municipal advocates intend to lobby for a continued phase-in in future years.

Budget language provides the state will spend roughly $ 1.8 billion in federal American Rescue Plan funds on capital projects around the state, including $ 300 million for projects at Rutgers University, $ 300 million for water infrastructure, and $ 170 million for lead paint remediation.

“We’re going to eliminate lead paint in houses,” said Assemblywoman Eliana Pintor Marin (D-Essex), the Assembly’s budget chair. “Maybe that’s not a big deal for some of you here, but for me and my district, that’s crucial. ”

Budget language also provides the governor with a $ 300 million pot of money he can spend without seeking legislative approval, with some restrictions.

Coupled with the $ 305 in federal aid dollars New Jersey is spending on affordable housing construction, those allocations will leave New Jersey with roughly $ 1.1 billion in unallocated federal aid whose expenditure must be approved by a legislative panel.

Other federal dollars will be used to partially fill a $ 4.2 billion fund intended to pay off debt or directly fund capital projects and thereby avoid borrowing.

NJ Transit will again receive a $ 100 million general fund subsidy and $ 82 million in a diversion from the state’s Clean Energy Fund. It’ll get another $ 40 million in American Rescue Plan money.

The transportation agency’s largest sources of funding will come from the transportation trust fund ($ 760 million) and the New Jersey Turnpike Authority ($ 721 million), with additional federal stimulus to help support its operating costs.

The Schools Development Authority will receive $ 1.9 billion in funding, $ 1.6 billion of which is devoted to capital projects in some of the state’s poorest districts.

The state is providing just over $ 9.5 billion in formula aid to schools, plus an additional $ 7.8 billion in equalization aid to districts unable to adequately fund their schools through local tax collections alone. The equalization aid represents an increase of nearly $ 3 billion from what Murphy proposed in March.

“Monmouth County has struggled more with school funding than probably any other county, and this budget gives them a significant increase in adjustment aid,” said Sen. Vin Gopal (D-Monmouth), the Senate Education Committee chairman. choosing to vote against it today, they’re voting against all these things. ”

Lawmakers also approved a state-level child tax credit that will provide taxpayers with a refundable per-child credit of up to $ 500. The award is at its full level for those making $ 30,000 and decreases by $ 100 for every $ 10,000 in additional income.

Democratic legislators again faced criticism from Republicans and progressive advocates over an opaque budget process this yearThe nearly 300-page budget bill reached GOP lawmakers on the Senate Budget and Appropriations Committee less than 30 minutes before the panel’s Democrats advanced it.

“There was no transparency. We couldn’t possibly look at this piece of legislation before we voted on it. But more importantly, the public couldn’t look at this,” said Assemblywoman Nancy Munoz (R-Union), adding, “ We have had 48 hours, but the public doesn’t have a chance to have any input on this. That input ended on Monday night. ”

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