The New Jersey Assembly Budget Committee spent more than three hours Wednesday questioning state budget officials on Gov. Phil Murphy’s proposed $32.4 billion budget that includes $4 billion in borrowing from the federal government and a $2.2 billion surplus.
The Legislature must approve a budget before the nine-month 2021 fiscal year begins on Oct. 1.
Republicans oppose Murphy’s plan to borrow federal funds for programs, such as the “baby bonds” proposal that would give each New Jersey baby born to families at less than 500 percent of the federal poverty level a $1,000 bond while adding taxes for millionaires.
“Do you think that borrowing will put New Jersey in a better or worse position going forward with future budgets?” Assemblyman Hal Wirths asked Frank Haines, the legislative budget officer.
Haines said the proposal, with borrowing included, results in a larger year-end surplus than the state has had in “quite a while.”
“It trades off resources to balance the current budget and to carry in to the following budget with taking on a long-term obligation, that being $4 billion and the interest payments and the retirement payments that go along with that are trade-offs,” Haines said.
While the Assembly Budget Committee was meeting, Murphy was touting his baby bond proposal with U.S. Sen. Corey Booker in Paterson.
“To emerge from this crisis as a stronger, fairer, and more resilient state, we need to lay the foundation for the next generation of New Jerseyans to secure their spot in the middle class and break the cycle of economic inequality,” Murphy said in a statement.
Assemblywoman Serena DiMaso said she disagreed with the “baby bonds” beginning at a time when the state was hurting.
“We’re putting bonds in place for children who are not here yet and not taking care of the children that are here,” DiMaso said in an exchange with Treasury Secretary Elizabeth Maher Muoio.
DiMaso questioned the need to raise the gas tax by 9.1 cents when the Office of Legislative Services suggested an increase between five cents and 10 cents. The state was shut down and fewer people were traveling during the first part of the year, she said.
“So to use those numbers to base the rest of the year on when we are continuously opening up is really not a fair set of numbers to be using,” DiMaso said. “And again, I am not trying to be argumentative but we know that next year the governor is up for reelection so with the formula based the way it is next year the numbers can be adjusted downward and then it looks great that he took back the tax. This year, when we need the help the most, we shouldn’t raise the tax (9.1 cents), especially when we have testimony from OLS that says somewhere between five and 10 cents.”
Muoio said the tax was based on a formula, not politics.
“We have to look at the data and we calculate the increase or decrease,” Muoio said. “The first year we were here we had to do an increase. Last year it was flat.”
Assemblywoman Nancy Muñoz, R-Union, questioned a tax on opioids manufacturers that could increase the costs of the pain meds.
“The health care taxes, particularly those on prescription pain medication, are like sin taxes,” Muñoz said. “It isn’t a sin to be sick.”
The Senate Budget and Appropriations Committee will continue budget hearings on Thursday with the Department of Education and the Department of Corrections.
