Murphy proposes $44.8B budget, boosting pension, school aid

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TRENTON, N.J. (AP) – New Jersey Democratic Gov. Phil Murphy on Tuesday unveiled a $44.8 billion budget proposal, seeking to boost spending by nearly 9% on a host of programs, including the public pension, school aid and a $500 tax rebate to nearly 800,000 families.

Murphy’s proposal includes no new taxes or fees and relatively few spending cuts, mostly in the form of savings from what his administration says are underused programs. He unveiled the spending plan during a remote speech because of the coronavirus pandemic, instead of with the usual pomp and ceremony during a joint legislative session in the General Assembly.

He held true to his left-leaning philosophy and pledged to move forward despite the economically crippling pandemic, which has led to record-high unemployment rates and quarterly gross domestic product declines. The state’s revenue picture has improved since the direst predictions last year, though.

“Even as we continue to confront the challenges presented by the COVID-19 pandemic, we cannot – and we will not – allow our state to sit still. We won’t allow New Jersey to be pulled backward,” Murphy said in a letter to lawmakers outlining his proposal.

The proposal seeks to make a 34% increase in the state’s share of the public pension, which includes retired teachers as well as state workers and others, putting the payment at $6.4 billion. That’s up from $4.8 billion in the current fiscal year, and it’s the first time the state has made what experts call the full actuarily determined payment – meaning the state is fully financing its share of the pension burden.

If adopted by the Democrat-led Legislature, this would represent the first full payment in a quarter-century and the fulfillment of a key promise Murphy made to public-sector labor unions, which vocally backed the governor’s 2017 campaign and are expected to be a key ally as he seeks reelection this year.

The increased spending would be financed in large part by a drawdown in the state’s surplus, which would fall from nearly $5 billion at the start of the fiscal year to about $2.1 billion under the proposal.

There’s higher spending on K-12 education, with aid to schools climbing by nearly 7% to $9.26 billion. That, too, if adopted is at least a partial fulfillment of a campaign pledge. Murphy faulted his predecessor, Republican Chris Christie, for failing to apply a state Supreme Court approved funding formula for schools.

Christie’s school funding stayed nearly flat over his eight years. If the proposal is enacted, school funding will have increased by more than 14% since Murphy took over.

New Jersey’s fiscal year ends June 30, so the budget goes next to the Legislature, which typically alters the governor’s suggestions. Republicans are in the minority and have little leverage.

Along with Murphy, both houses of the Legislature are up for reelection this year.

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