NJ Spotlight News
What's inside NJ's ballooning budget?
Clip: 5/28/2025 | 5m 58sVideo has Closed Captions
Interview: John Reitmeyer, budget and finance writer, NJ Spotlight News
Gov. Phil Murphy and lawmakers have just weeks left to hash out an agreement on state spending priorities and deliver a constitutionally mandated balanced budget.
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NJ Spotlight News is a local public television program presented by THIRTEEN PBS
NJ Spotlight News
What's inside NJ's ballooning budget?
Clip: 5/28/2025 | 5m 58sVideo has Closed Captions
Gov. Phil Murphy and lawmakers have just weeks left to hash out an agreement on state spending priorities and deliver a constitutionally mandated balanced budget.
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Learn Moreabout PBS online sponsorshipyeah and state leaders count on that shore tourism revenue when hashing out the budget each year and they're now entering the home stretch where Governor Murphy and lawmakers need to come to an agreement on those spending priorities by the end of June a key piece of this year's debate is the overall size of the budget which has grown to record highs during the Murphy administration largely because the governor and legislature have increased spending on things like direct property tax relief public school aid and public worker pension obligations our budget and public finance writer John Wright Meer joins us now as part of our under the dome series for a deeper look at the tension points in the negotiations which by the way are playing out against the backdrop of a big fall election john so we cannot ignore that because of course that comes into play here but you outlined some of the big ticket items what are they what's at play yeah I mean we could start with direct property tax relief property taxes are at an all-time high in New Jersey and it's been a priority of this governor and legislature to beef up spending on direct property tax relief so 10 years ago when Chris Christie was governor we're around a billion dollars on a $34 billion budget where are we now now we're up if if Murphy's uh latest proposals become a part of the next budget it'll be over $4 billion on a nearly $60 billion budget and so as the topline numbers go up so do numbers for things like these direct property tax relief programs a lot of people are probably familiar with the anchor program now there's a new one coming online early next year called stay NJ that's just for senior homeowners and that's seeing a $600 million increase under Murphy's proposed budget and so the numbers are getting big but a lot of New Jersey residents are frustrated with high property tax bills so this has been the effort to sort of address those concerns same for school funding right we see a lot of communities struggling with how much we're putting aside to fund our public schools which are funded at the local level with property tax revenue and so spending has gone up in this area as well if Murphy's budget is enacted as he's proposed it it would be over 12 billion just on what we call formula aid which goes directly to the classrooms through the state school funding formula for K through2 public schools and then of course pension funding the benefits that have been promised public workers in New Jersey that's a defined benefit it's a it's a pension uh 10 years ago we were spending a little over a billion dollars on the pension contributions these obligations are now totaling more than seven billion wow so you add those up and there's there's the bulk of your budget we can tick off a bunch of these and that's how you get a budget that 10 years ago was in the mid30 billions and is now creeping close to 60 billion but is it not still a fair criticism for lawmakers particularly um Republicans who have pointed out just how much this budget has ballooned how much and what's required to sustain that spending so there have been tax increases along the way some of it's been normal growth but a lot of it has also been revenue raised through tax increases and that's where the arguments uh that we see play out in Trenton are basically centered on is as we meet these obligations the state school uh funding formula says we should be spending a certain amount on public school aid but you have to bring in the revenue needed to spend at that level or do they change the formula and that's this is an example of the types of debates that we see play out as the these line items get so big right there's always a tax associated with it like in the case of school funding it's the income tax yeah i mean they play out uh behind closed doors and then also of course in the budget hearings um that you cover but let me just say on that property tax relief so based on those programs how many dollars are are we talking about out of the budget that are actually going toward these direct relief programs direct programs are on course to to rise above 4 billion for the first time ever under Murphy's budget proposal and we're in that period now where we're waiting for lawmakers to draft the next spending bill so Murphy proposes a budget and he has the power to say this is how much revenue will come in during the next fiscal year but lawmakers have the constitutional authority to actually draft the spending bill and so they can take what Murphy's proposed and put it in their spending bill or they can rewrite the numbers and so we're in that period right now where we're waiting for lawmakers to speak through an appropriations bill you mentioned stay that's for seniors the other benefits it seems though are staying flat at a time when a lot of folks are talking about affordability and inflation so what can they look for there what's in it for the average guy it's a really good uh point to bring up for non seniors both homeowners and renters they largely benefit from the anchor program right now as proposed Anchor benefits would remain flat and so we know that property tax bills are up on average by almost $300 rents are increasing so the the the issue is for seniors you're going to do well for non seniors as your costs have increased the state funded benefits are not rising to meet those increases you're still getting them but the buying power effectively of the benefits is being eroded by inflation all right you can read all of John's reporting on this as well as past reporting on the budget and to continue following it on our website njspotlightenews.org john always good to talk to you thanks so much for being here you're welcome under the Dome is made possible in part by the Corporation for Public Broadcasting a private corporation funded by the American people [Music]
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