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    Governor Murphy Releases Budget Address

    By: GUEST on Mar 08, 2019

    By: Sabeen Masih, Capital Impact Group

    Governor Phil Murphy delivered his second budget address today, proposing a $38.6 billion state budget for Fiscal Year 2020, including a plea to lawmakers to raise taxes on millionaires and work towards a common goal throughout the negotiation process. 

    Murphy also stated that the $1.2 billion increase from FY2019 will go towards local schools which will increase by $282.1 million, as well as NJ Transit, which will result in a net $25 million increase in funding towards the agency. Funding for higher education will rise to $30.8 million 

    In terms of healthcare, the budget allows for the continuation of funding towards the opioid epidemic, with Governor Murphy citing that $100 million will be just the start to address this crisis. The state also includes $262 million in charity care dollars for hospitals, which matches last year's allocation. 

    The Governor also claimed to have realized $1.1 billion in "real and sustainable savings" for the next fiscal year, with more than $200 million in cost-reductions in state departments. This is following a lengthy negotiation with the Communications Workers of America (CWA), the largest state workers union. Further, about $800 million in savings are from changes to public employee health care benefits — a 16-percent reduction from the current fiscal year. An additional savings comes from the state's change in health benefit plans, shifting Medicare-eligible retirees to Medicare Advantage plans (offered by Aetna which took effect in January), which results in $196 million in savings for the new fiscal year. 

    Despite legislative leadership repeatedly stating they would not agree to any increase in taxes, Governor Murphy is proposing that there would be a surplus of $447 million, if the threshold for the state's top 10.75% tax bracket was lowered from $5 million in annual income, to $1 million. This would raise taxes on 18,000 NJ residents, as well as 19,000 non-residents.

    Though the tone of the Governor's address was better received by Senate President Sweeney and Assembly Speaker Coughlin in comparison to last year, leadership is still skeptical of how successful budget negotiations will proceed. Though Murphy seemed to have cited some of last year's policies from the legislature's budget (such as Charity Care), and successfully negotiated with the CWA which resulted in savings of $1.1 billion, it is unclear how the next few months' conversations will proceed.

     

    Released: March 8, 2019, 12:47 pm
    Keywords: Announcements


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