Gov. Mikie Sherrill will deliver her first budget message on Tuesday, and she has indicated that cuts are on the way. New Jersey, the governor announced last month, faces a severe structural deficit, and says spending cuts are the only
The expected cuts are a change of pace after former Gov. Phil Murphy’s years of repeated budget growth — from $37.2 billion in FY2019 to $58.8 billion in FY2026 — and legislators are bracing for a turbulent budget season. Rising costs and disappearing revenues mean that adjustments must be made, and the governor said tax increases are off the table, leaving only cuts.
As a candidate for governor, Sherrill repeatedly promised to cut costs and make the state more affordable.
But she hasn’t yet specified what she might cut, letting rumors roil Trenton in the days leading to her budget address. No matter what path she picks, though, legislators expect this budget season to be protracted and difficult.
Stay NJ
More than any other program, there is one that is rumored to be facing a cut, and it happens to be the Assembly Speaker’s darling: Stay NJ.
The program provides major property-tax relief benefits to seniors who make up to $500k a year; Assembly Speaker Craig Coughlin and other proponents say the legislation allows the state’s seniors the ability to afford to stay in New Jersey as opposed to being pushed out of the state by high costs.
The program’s enormity makes it an easy target. Stay NJ is expected to cost about $1.2 billion over the next fiscal year, or about 2% of state spending (this doesn’t include the cost of other property-tax relief programs like ANCHOR and the Senior Freeze).
Groups like New Jersey Policy Perspective have pushed for tighter eligibility limits for Stay NJ, particularly in terms of income. Some legislators have suggested that limiting the program to seniors who make less than $250k could be on the table, but even then, some have expressed concerns that such a cut wouldn’t make as big a dent on costs as they would like.
And beyond that, such a cut could be politically tricky for Sherrill. The program’s first checks just went out, and Republicans who helped pass the legislation say the relief is popular. And several legislators have said a cut could cause negotiation woes with Coughlin, who fought hard for the program in the latter years of Gov. Phil Murphy’s administration.
Still, the New Jersey Monitor reported that Treasurer Aaron Binder refused to rule out cuts to Stay NJ, and Sherrill’s address on Tuesday will hold the answers.
Assembly Progressives
Assembly Democrats possess their largest majority in decades, but the lower chamber is nonetheless expected to be home to much of the contention this budget season.
Now that the Assembly features a small bloc of progressive members who obtained office without the help of party machinery, they’ll have to decide how they want to approach the budget process, which happens to be the first budget with significant expected cuts in years. The bloc includes members like Katie Brennan (D-Jersey City) and Ravi Bhalla (D-Hoboken) and could grow depending on the issue.
Some of these progressives might balk at cuts to spending, and may even push for an increase in aid to the state’s urban areas. And though Sherrill has promised no increase in taxes, many progressives have pushed for an increase in the state’s millionaire’s tax, forcing New Jersey’s highest earners to pony up more. The risk, though, would be the possibility of such earners leaving New Jersey in search of friendlier tax brackets.
The Democratic domination of last year’s Assembly elections, however, diluted the power of this progressive bloc. Had fewer Democrats flipped seats, it would have been easier for them to stand in the way of legislation they oppose, but now 17 Assembly Democrats would have to oppose the budget to block it (or 18, if GOP Assemblyman Sean Kean (R-Wall) supports the budget again). The math doesn’t allow for Assembly progressives to hold a controlling stake in the process, but their support as a bloc could be key if other Democrats back off from the budget.
Senate President Nicholas Scutari and Senate Budget Committee Chair Paul Sarlo (D-Wood-Ridge) expect to land their caucus behind any budget they agree to, so the hardest part could be finalizing a budget that gets 41 Assembly votes and pleases Scutari and Sarlo.
Delivering for the district
With the abolition of the county line, showing results for one’s district is as important as ever. If an ineffective legislator allows significant cuts to programs in their district, a primary challenger could highlight those difficulties to an angsty electorate. And last year’s elections proved that, with limited exceptions, few local parties are capable of guaranteeing victory for their backed candidates.
Some areas will be protected by virtue of the process; Assembly Budget Committee Chair Eliana Pintor Marin (D-Newark), for example, will help Newark hold its own in the budget process, thus helping protect the city’s other legislators.
(These concerns go beyond electoral math too; it can also apply to vote-counting inside the legislative chambers. A budget cut to South Jersey hospitals could, for example, alienate South Jersey Democrats and put their vital support at risk.)
Hudson County faces a potential version of this issue right now. Jersey City last week signaled its intent to request more than $100 million in state transitional aid, which they say is needed for an incoming fiscal crisis. Several officials, including Hudson County’s legislative delegation, called on the state to provide aid in an op-ed.
(Sherrill gave Jersey City officials and organizers a big win in a separate manner last week, when she announced plans to shrink a proposed Newark Bay Bridge replacement that faced ire from opponents concerned about traffic and the environment.)
Sherrill has also signaled a desire to limit budget resolution funding, perhaps better known as “pork” projects that typically add hundreds of millions of dollars to the final budget totals. But legislators value such spending, and it won’t be easy to hold off legislators who feel the need to show concrete returns to their constituents.
