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FY2016-2017 New Jersey Budget

Governor Chris Christie delivered his seventh budget message to a joint session of the New Jersey Legislature on Tuesday, February 16, 2016, officially kicking off the Fiscal Year 2017 budget process.

The Governor offered highlights of what he characterized as a fiscally responsible balanced budget that imposed no new taxes on New Jersey taxpayers.  He also thanked the people of New Jersey for allowing him the opportunity to run for President.

In all, Christie’s new budget calls for a 3%increase in spending over the current $33.8 billion fiscal year budget, relying on a modest 3.1% projection for revenue growth. That’s a shade under the growth forecast for the current budget, and much less than some of Christie’s prior spending plans.

And though the proposed budget doesn’t factor in a gas-tax hike or new borrowing for a state Transportation Trust Fund that’s on course to run out of money by the end of June, Christie also did not take a firm position against a gas-tax hike, which is the preferred path among Democrats. Afterward, Democrats said that means there’s now room to negotiate. 

The new budget also recommends a surplus fund of $800 million, leaving enough of a cushion for lawmakers and Christie to absorb some loss of revenue that would come with the kind of tax cut Christie would be seeking in a broader deal on transportation funding.

The Governor described two key principles of his FY2017 budget recommendation. The first was Fiscal Restraint; the proposed budget calls for $34.8 billion in State appropriations with a decrease in discretionary spending over FY2016.  The second principle was the continued Advancement of the Hard Reforms Christie put into action over the last six years. 

To support these principles, the Governor:

  • Stated his opposition to the     proposed constitutional amendment to raise the minimum wage to $15/hour,    claiming that the increase would cause more businesses to move out of New     Jersey.  Christie cited $18 billion     in lost revenues due to “outmigration;”
  • Acknowledged the need to address     the looming insolvency of the Transportation Trust Fund (TTF) but stated     that any solution must be based on “tax fairness.”  Christie mentioned the repeal of the     Estate Tax as one example of “tax fairness.”  The Estate Tax has been discussed by key     decision-makers in the Legislature as a possible offset to an increase in     New Jersey’s gas tax, currently second-lowest in the nation.  Christie also denied claims that the TTF     is in crisis and called such claims politically driven     mischaracterizations;
  • Strongly opposed the proposed     constitutional amendment to fund the State Pension saying that it places     government workers ahead of every other citizen of the State.  The Governor said the Pension Amendment     would hurt aid to municipalities, school funding and senior citizens.  He further stated that the $1.9 billion     contribution to the pension system in his FY2017 budget proposal is the     largest of any prior administration.     Christie said that the root cause of the pension crisis is     dysfunction in need of structural reform.     To this end, Christie’s budget calls for $250 million in savings     from active public employee and retiree health costs;
  • Proposed more than $16 billion in     direct and indirect property tax relief, including $13.3 billion in school     aid, $1.5 billion in municipal aid, and $1 billion in direct property     taxpayer relief programs;
  • Recommended more than  $20 million toward support of women’s     services and domestic violence reduction programs;
  • Proposed a $60 million investment     in graduate medical education for New Jersey’s teaching hospitals.

 
The Governor’s budget also proposed the following spending, which impacts some of United Way’s and our partners’ legislative priorities:

  • Preschool     funding remains at the FY 2016 level of $655.5 million.
  • State Aid     to Schools:  a nearly $94 million     increase, a 1 percent increase in aid for schools from FY 2016.
  • Earned     Income Tax Credit:  The governor’s     budget continues the FY 2016 increase in the Earned Income Tax Credit from     20 to 30 percent of the federal credit.     This helps more than 500,000 of New Jersey’s lowest-income workers.

Additional 2016-2017 Budget Resources

 

What’s next?
Some of the details are still sparse and will emerge in the coming weeks. The budget will be debated in the state Legislature over the next few months. The Legislature must adopt a final budget by June 30.

The UWGPSNJ Public Policy Committee will be meeting and part of their discussion will be on where UWGPSNJ should be positioned with budget advocacy for the ongoing 2015-2016 and new 2016-2017 budget proposal.

If you have any questions about the budget proposal, or would like to submit any feedback about our position to the public policy committee, please reach out to me.

Thank you for your partnership in driving Impact for our friends and neighbors across the region.

Sincerely,

Jim Cawley
President & CEO