Statement From Republican Senate Budget Committee Members Challenging the Governor When Presenting His Budget Proposal on February 27 to Embrace Long-Ignored Constructive Republican Ideas That Address the Affordability Crisis

February 15, 2024

Members of the Senate Republican Budget Committee called on Governor Murphy to embrace their long-ignored constructive ideas that would help address the affordability crisis in New Jersey. Senators Declan O’Scanlon (R-13), Michael Testa (R-1), Doug Steinhardt (D-23), and Carmen Amato (R-9) issued the following statement:

Members of the Senate Republican Budget Committee called on Governor Murphy to embrace their long-ignored constructive ideas that would help address the affordability crisis in New Jersey.

If the governor truly cares about affordability, his February 27^th budget proposal will reverse spending excesses and financial missteps and finally embrace constructive Republican budget proposals that have fallen on deaf ears for the past several years.  His embrace of Republican restraints and reforms will be more important than ever as this year revenues are beginning to decline or stagnate, and as federal COVID block grants dry up, NJ Transit faces growing deficits and the State’s Transportation Trust Fund needs to be reauthorized. The State’s longer-term budget imbalances have been warned about for years with no plan to address them, and a bipartisan group of fiscal experts at Rowan University recently sounded the alarm again when they pointed out that the current year budget spent $1.55 billion more than Treasury anticipated in recurring revenues and projected the imbalance will increase $3.2 billion to $7.1 billion each budget year from FY25 to FY28 absent spending restraints and reforms.

The time for restraints and reforms is long overdue.

• The following links 1.) https://www.senatenj.com/index.php/oroho/senate-republicans-propose-fy-2024-budget-plan-with-6-billion-of-new-tax-relief-more-debt-reduction-spending-moderation-greater-transparency/60606 AND 2.) https://www.senatenj.com/index.php/oroho/senate-republicans-propose-8-billion-of-new-tax-relief-bolstering-surplus-doubling-debt-repayment-increasing-oversight-in-budget-plan/57385 bring you to comprehensive Republican budget proposals offered in each the last two budget years. They offered constructive proposals to better manage our State budget, with a greater focus on tax relief, spending restraints, and reforms. Almost all the constructive suggestions for tax relief and restraint and reforms were ignored. They included:

• • Stopping new tax/fee increases including income tax increases from bracket creep, employee wage tax increases, and highway toll increases.
  • Reducing taxes and providing tax relief now – not in 2027 like the STAY NJ plan which might never get implemented at all.
  • Changing school funding to moderate certain excesses and ensure all districts’ aid can be increased along with inflation.
    • The failure to embrace past recommendations is especially frustrating because there are obvious and glaring excesses where a select few school districts have received enormous increases in aid – with percentage increases as high as 40% in a single year and hundreds of millions of dollars over time – despite unchecked spending abuses reported on by multiple media outlets. Meanwhile, there are schools that have experienced unforeseeable and erratic decreases in aid due to obvious flaws in the funding formula that have been left uncorrected. CRITICALLY, SCHOOLS ENACT BUDGETS THIS SPRING BASED ON AID PROPOSED BY THE GOVERNOR.  IF THE GOVERNOR’S BUDGET PROPOSAL SLAVISHLY FOLLOWS THE BROKEN APPOACH UNDER A 7-YEAR-OLD LAW (S2), UNFAIR AND INADEQUATE DECREASES FOR A 7^th STRAIGHT YEAR WILL DESTROY SOME SCHOOLS WITH NO RATIONAL PLACE LEFT TO CUT, AND DRIVE-UP PROPERTY TAXES FOR OTHER SCHOOLS.
  • Stopping/controlling some of Governor Murphy’s unsustainable new spending programs.
  • Reforming abuses in the pension system that were grandfathered in years ago to help pay for targeted cost-of-living adjustments for the oldest retirees with modest pensions and who have been most impacted by cost-of-living adjustment freezes for a long time.
  • Controlling public health care costs by supporting public employee union proposals that will save money for employees AND taxpayers who share in premiums.
  • Stopping wasteful and/or unprioritized spending of far more than $1 billion on hundreds of special “pork” projects including $58 million for a French Arts Museum in Jersey City; funding for a private pool in one of the richest communities in the State; funding for an artificial turf cricket field; and funding for a lacrosse club.

• The following link, https://www.senatenj.com/CivicAlerts.aspx?AID=217, brings you to a more recent proposal by Republicans that would put the Transportation Trust Fund first in line to receive a substantial share of $1.5 billion in available Debt Reduction and Avoidance funds.

• • Nonpartisan budget analysts agree that using these funds to pay cash for transportation projects — instead of issuing expensive 30-year bonds — will save three times as much money for taxpayers as the Administration’s use of the funds to retire shorter term, lower interest rate debt.
  • The proposal will help head off tax increases the Governor is pushing to shore up the important program that funds critical transportation projects.

The Governor’s budget address probably won’t even mention the tax and fee increases he has recently been implementing and proposing – as though they have nothing at all to do with State finances and aren’t making New Jersey more unaffordable.

• NJT fare increases and highway toll increases are regressive and moving full steam ahead.
• “Bracket creep” is causing more and more people to have higher income tax liabilities as inflation pulls them into higher income tax brackets.  It’s regressive and will cause people to pay $500 million more in income tax payments.
• Regressive tax increases to reauthorize TTF are being pushed behind closed doors.
• Highly regressive employee wage taxes to fund UI and Family Leave will spike next January.

The much-touted “STAY NJ” program will still not be fully funded or operational in the budget and won’t be funded until the FY 2027 budget – proposed after the governor leaves office.

• The Governor’s budget will likely contain a small, proposed increase for STAY NJ that will fund a fraction of the program’s costs. But the funding will simply be kept by the State – being eroded by inflation – for a promise to provide tax rebates to some people in FY 2027 – the year AFTER the Governor leaves office. A commission that only recently started meeting is charged with identifying how to pay for STAY NJ – code for raising more taxes in the name of tax relief.

Past budget excesses that Republicans have repeatedly warned against will grow in the coming budget.

• Republicans past budget alternatives noted above identified specific spending excesses and new programs that should be halted or moderated. Many of these past excesses and new programs are growing – even while the economy is dropping.
• Over the last several years, even as the overall funding for education climbed, it spiked dramatically in relatively few places by as much as 40% in a single year – while more than 100 other schools lost funding and 100 more received aid increases that didn’t keep up with inflation.
• New programs are expanding that force taxpayers to pay for: other people’s down payments on homes; legal bills and certain other benefits for foreign nationals fighting Biden deportations; cash welfare payments to convicted drug distributors.
• Gross overpayments to certain out-of-state health care institutions and other health care vendors though the State’s public employee health care programs continue to grow.
• As with last year’s budget process, the Governor’s budget proposal will again propose 50 or more special line items of special “pork” projects that he – and his cabinet members throughout the budget process – will refuse to explain.  Last year, it was the first time a governor of either party actually inserted dozens and dozens of “pork” or “earmarks” or “Christmas tree items” in a proposed budget outside of any fair or open grant process.  It wasn’t normal and it was a staggering lack of transparency – and some of it, not all – was waste.

• • He should refrain from the sorts of obviously wasteful “pork” or “earmarks” or “Christmas tree items” he proposed last year: a $12 million increase ($58 million in total… so far) for a French Arts Museum in Jersey City riddled with pay-to-play, no-bid vendors and $30 million wasted on a French Corporation to use their name on the museum and their consulting services; funding for a private pool in one of the richest communities in the State; and even funding for a lacrosse club.
  • If the Governor is going to insert “pork” or “earmarks” or “Christmas tree items” he thinks make sense, he ought to provide an explanation and justification for them, something he has still not done to this day for items proposed last year.  Without that transparency, the proposals can’t be fairly assessed against the need to make New Jersey more affordable.