On Tuesday, Governor Phil Murphy proposed a $55.9 billion State Fiscal Year 2025 budget. In his address to a joint session of the Legislature, the Governor stated that his proposed budget outlines a comprehensive plan to bolster the state's infrastructure in education, property tax relief, public transportation, and fiscal discipline.
The following is a summary of key components of the budget, prepared by the NJ League of Municipalities.
Municipal Aid: Allocating $1.635 billion, Municipal funding has a proposed reduction of $134.3 million from FY2024 but continues to support initiatives like the Local Efficiency Achievement Program (LEAP) and the School Regionalization Efficiency Program (SREP). Energy Tax Receipts are projected at $805 million, and the budget does not include the $150 in Municipal Relief Aid received in FY24.
Housing Initiatives: The proposed budget allocates $10 million to incentive municipalities to create new Accessory Dwelling Units (ADUs); $15 million to aid rental assistance beneficiaries towards homeownership and supports non-profits in home rehabilitation; and $32 million for Down Payment Assistance.
Property Tax Relief: Proposes more than $3.5 billion in direct property tax relief through the ANCHOR program and school funding; fully fund school aid; and $7.1 billion pension payment, representing a full pension payment for the fourth year in a row.
Opioids: The budget includes the allocation of $95 million towards expanding harm reduction centers, increasing access to addiction treatment, supporting community peer recovery centers, providing housing assistance for individuals with substance use disorders, and other initiatives. This funding is part of New Jersey's plan to utilize over $1 billion received from the settlements with opioid manufacturers and distributors, aimed at combating the opioid crisis over the next twenty years.
NJ TRANSIT Support: Introducing a Corporate Transit Fee, the budget proposes a dedicated funding source for NJ TRANSIT. The Corporate Transit Fee will be funded by major corporations with yearly incomes of more than $10 million to sustain and improve service quality.
Investments in Housing and Healthcare: Over $50 million is directed towards enhancing the state's housing supply and affordability. It also increases access to prescription drug assistance and introduces the RetireReady NJ program for private sector retirement savings and allocates $3.5 million.
Educational Enhancements: The budget supports the completion of the school aid formula with an additional $908 million for K-12 education, funding for pre-K expansion, teacher training, and literacy programs, alongside initiatives like free school meals and the summer EBT program.
Economic Development and Innovation: With a focus on reinforcing New Jersey's position in the innovation, clean energy, and entertainment sectors, the budget includes investments in AI education, support for small businesses, climate change initiatives, and workforce development.
Public Safety Initiatives: An additional $9.5 million is proposed for the ARRIVE Together program, nearly doubling its funding to extend its reach and hours. This initiative, a collaboration between police and mental health professionals, is complemented by investments in the parole system and the Office of the Public Defender to safeguard civil rights and maintain a low recidivism rate.
Truck Traffic Excise Fee: proposes a $1 truck traffic excise fee on warehouses based on the number of truck trips. The budget estimates $10 million in new revenue to mitigate the impact of new warehousing development on traffic and road quality.
The Legislature will soon take up the proposed budget and convene hearings through the spring. A balanced budget is constitutionally required to be signed by midnight, June 30 for Fiscal Year 2025.
Andrew LaFevre, Legislative Analyst, New Jersey League of Municipalities
