The public just got their first taste of Murphy’s proposed $48.9 billion budget in New Jersey. Not everyone is happy.
Gov. Phil Murphy’s massive $48.9 billion budget proposal is the largest in state history, but some say it doesn’t do enough to help New Jersey’s most vulnerable populations.
Others say he is making spending commitments with excess revenue that is unsustainable, raising the risk that taxes will have to be raised in the future to cover deficits.
Dozens of lobbyists, business organizations, advocacy groups and labor representatives intervened on Monday as the state Assembly Budget Committee held its first hearing to gather public testimony on the proposed spending plan. by the governor.
Negotiations begin at a time when Trenton’s coffers are overflowing with a $4.6 billion surplus in the current budget and a projected $4.2 billion surplus for the new fiscal year that begins July 1. This is on top of the billions of dollars in federal pandemic relief funds that remain unspent.
The issues of affordability and high inflation were raised repeatedly throughout the hearing, which lasted about four hours. And much of the testimony highlighted the ongoing struggles of many low-income households and small businesses across the state.
“In the spirit of affordability, which the Legislature and Governor have prioritized this year, we urge this committee to examine the cost of doing business in New Jersey,” said Michael Egenton, executive vice president. of Government Relations from the New Jersey State Chamber of Commerce.
Egenton welcomed the improved skills training and workforce development programs in Murphy’s proposed budget and said the business community is relieved to see no new taxes.
But, he added, more is needed to help businesses weather unprecedented challenges as the state’s economy continues to recover from steep declines in the early stages of the pandemic.
“There are still many businesses struggling to return to pre-pandemic levels as they grapple with issues such as rising business costs and inflation, supply chain delays and a labor shortage,” Egenton said.
Costs of basic necessities began to rise in early 2021 as companies were forced to raise wages to fill vacancies, and the global supply chain cracked under the pressure of growing demand from consumers following widespread closures.
The sudden rise in food, housing and transportation prices was meant to be temporary, but costs continued to rise and the annual rate of inflation in the United States hit a 40-year high in February.
Meanwhile, state tax revenues are soaring and exceeding expectations for the second year in a row.
Ongoing struggles among New Jersey’s most vulnerable populations have prompted some groups to question Trenton’s recent push to make the state more affordable.
Peter Chen, senior policy analyst for New Jersey Policy Perspective, said many recent “affordability” proposals are benefiting the wealthy, as rising housing and food costs have overshadowed modest worker wage growth. low income.
“New Jersey’s economy works best when it works for all of us,” Chen said. “That’s why it’s so important that the fiscal year 2023 budget propose changes that make the tax code fairer and the state more affordable for low- and middle-income households.”
With questions lingering about the sustainability of recent revenue increases, decisions made by state leaders this budget season could have significant ramifications for New Jersey’s ongoing recovery and the future of the economy. State.
The current level of spending in the governor’s plan, which represents a 41% increase since Murphy took office, is unsustainable, said Christopher Emigholz, vice president of government affairs for the New Jersey Business and Industry Association.
“Fiscal sustainability often becomes an affordability issue because an unsustainable structural imbalance has a bad way of becoming sustainable through tax increases that our taxpayers simply cannot afford,” Emigholz said. “An unsustainable budget is not affordable.”
Anthony Russo, president of the Commerce and Industry Association of New Jersey, echoed those warnings and said many businesses were concerned about the increased spending.
“We all know the years when we struggle to identify income, so now would be a good time to pay down debt and maybe cut expenses,” Russo said.
Monday’s hearings kicked off three months of budget negotiations in the state Legislature, which must approve a final budget before the start of the new fiscal year on July 1.
The state Assembly will hold another public hearing on Wednesday, and the Senate has scheduled its first for next Tuesday.
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