In Late-Night Votes, NJ Lawmakers Advance $54.3 Billion Budget That Few Have Seen

By Nikita Biryukov | New Jersey Monitor

Both legislative budget committees approved a $54.3 billion budget in party-line votes late Wednesday night, narrowly averting a procedural flap that would have forced a government shutdown but providing little information about the massive spending bill.

The votes by the committees came shortly before midnight. Had lawmakers waited much longer, provisions in the state constitution that require bills to sit for a calendar day between leaving committee and coming to a vote before the full Legislature would have pushed final budget votes beyond the statutory deadline of June 30.

Republicans raised familiar complaints about the budgeting process, accusing their Democratic counterparts of cobbling the spending bill together behind closed doors at the last minute, leaving members unaware of what they were voting on.

“You’ve got to realize that that is frustrating to us and should be frustrating to the people of New Jersey,” said Sen. Declan O’Scanlon (R-Monmouth). “The fact that we’re minutes, now 26 minutes away from a government shutdown is astounding when this should’ve been out two weeks ago, three weeks ago.”

Republican members received error-laden budget documents ahead of Wednesday night’s vote but did not see the full budget by the time it came to vote yay or nay. It’s unclear whether Democratic members saw the budget before their votes, though some claimed they had.

“We’ve seen a full budget document. Accuracy is in the eye of the beholder,” said Senate President Nicholas Scutari (D-Union).

Neither the Senate nor Assembly budget committees allowed public testimony on the budget bill.

According to Democrats on the committees, the budget bill for the fiscal year that begins July 1 includes a full pension payment, increased state school aid, larger tax rebates for New Jersey seniors, and a significantly smaller-than-planned deposit into a state fund meant to pay down debt or avoid borrowing altogether.

The full Legislature is expected to take final votes on the budget Friday. The new fiscal year begins on July 1, and lawmakers must approve and sign a budget before then to avoid a shutdown of the state government.

“Any budget is a compromise, and this one took, quite frankly, a little longer than expected,” said Sen. Teresa Ruiz (D-Essex), who chaired Wednesday’s meeting of the Senate’s budget committee.

It’s not clear how much money the state intends to hold in reserves as part of the new budget. Scutari claimed the state would have over $10 billion in surplus but declined to elaborate.

The bill spends roughly $1.2 billion more than Gov. Phil Murphy proposed during his February budget address, according to the preliminary figures.

Budget language provides the governor with a $100 million pool of federal American Rescue Plan Act funds he can spend without seeking the approval of the Joint Budget Oversight Committee.

The bill allocates just under $1 billion in federal funds for various purposes, including $275 million for affordable housing, $100 million for a boardwalk improvement fund proposed by the governor, and $35 million to modernize the state’s unemployment insurance system.

The state has roughly $1.1 billion in unallocated American Rescue Plan funds, meaning the state will draw those funds down in the coming fiscal year. Those funds must be allocated by the end of 2024 and disbursed by the end of 2026.

Under the bills approved Wednesday, the state would deposit $400 million into the fund intended to lower the state’s debt — far short of the $2.35 billion deposit Murphy proposed in his February budget address.

The overwhelming share of that deposit, $371 million, has already been appropriated to fund the construction of a replacement to the Edna Mahan Correctional Facility ($90 million), a new state police training center ($120 million), and maintenance and construction costs for the South Jersey Port Corporation ($24 million).

The Department of Transportation would also receive $137 million in debt defeasance funds to meet state match requirements on federal transportation project funds.

Lawmakers also approved a supplemental spending bill that appropriates nearly $159 million in funds from the current fiscal year, including $40 million to boost child care facilities and $83 million in education funding to avoid being forced to return American Rescue Plan funds.

The budget does not extend a 2.5% surtax on business profits above $1 million past the end of the calendar year. The surtax’s sunset is expected to cost New Jersey $322.5 million in foregone revenue in the fiscal year that begins Saturday and $1 billion annually in future years.

Murphy and legislative leaders have signaled they would allow the surtax to expire, though they could still extend it outside of the budgetary process.