New Jersey Gov. Phil Murphy unveiled his executive budget proposal for fiscal year 2024, a record $53.1 billion plan that takes into account the state’s expectation for a shallow and short recession by holding off on large new initiatives while boosting reserves and addressing long-term obligations.
“This budget will better prepare New Jersey for any national or global economic uncertainty,” Murphy said in an address to lawmakers Tuesday. “None of us hopes for an economic downturn, but should one occur we will be on a far stronger footing to react in real time to ensure that critical investments can continue, that our economy can be backstopped, and that vital safety nets can be quickly put up so no one falls through the cracks.”
The Murphy administration says the new plan adds $500 million more to the state’s surplus, bringing the total to $10 billion for the fiscal year beginning July 1.“This budget will better prepare New Jersey for any national or global economic uncertainty,” said New Jersey Gov. Phil Murphy.
Murphy made no major program proposals but called for more than $2 billion more in spending over 2023 as his administration seeks to continue using stronger-than-expected tax returns to fund long-term obligations.
That includes paying for the third year in a row the state’s full obligation into its pension system and allocating$2.3 billion to either pay down existing debt or fund capital projects on a pay-as-you-go basis…
Marc Pfeiffer, assistant director at Rutgers University’s Bloustein Local Government Research Center, said the Murphy administration’s budget proposal prepares for revenue shortfalls while continuing to support popular public initiatives with an eye on local elections this year.
Murphy is a Democrat and his fellow Democrats control the legislature, though they haven’t always been on the same page.
“The entire legislature is up for reelection in the fall period, so it is an election-year budget,” he said. “At the moment, the economy’s doing stronger than the Fed expected it to and consumer spending is still up, so there’s uncertainty as to what next year’s revenues will look like.”
The proposal also seeks funding to extend initiatives popular with state Democrats including the ANCHOR property tax relief program, which will pay out refunds to 1.5 million people, according to the Murphy administration, and the Child Tax Credit program, which will see per child distributions doubled to $1,000.
That social spending will likely create “a cushion in case of a recession” for state residents, and give Democrats a win ahead of elections, said Pfeiffer.
Marc Pfeiffer, is a Faculty Researcher at CUPR