The SFY2025 Budget Appropriations Bills, A-4700/S-2025, were favorably released from both the Senate Budget and Appropriations Committee and the Assembly Budget Committee, respectively, on the evening of Wednesday, June 26, approved by both chambers on June 28, and signed by Governor Murphy the same day.
Highlights of interest to municipalities include:
Energy Tax Receipts and CMPTRA: The SFY2025 budget includes a total of $805.6 million for the Energy Tax Receipts Property Tax Relief Aid, (ETR) a decrease of 15.2% from the SFY2024 allocation of $950 million. The reduction comes from the elimination of the $150 million Municipal Relief Fund (MRF) that was included in the SFY 2024 budget.
The State allocated $75 million in the MRF in SFY 2023 and $150 million in SFY 2024. The Consolidated Municipal Property Tax Relief Act is set to receive $649 million.
ANCHOR and Stay NJ: The ANCHOR program is set to receive $2.2 billion to fund the tax relief program, providing up to $1,750 to 1.3 million homeowners and up to $700 to over 700,000 renters to help offset property taxes.
The Stay NJ Property Tax Credit Program is allocated $220 million for the SFY2025 Budget. The program is set to begin in SFY 2026. The Stay NJ Taskforce released its recommendations for the program earlier in June. In addition, the Assembly Budget Committee favorably released legislation, A-4706, revising various statutes to implement recommendations of the Stay NJ Task Force.
Rainy Day Fund: The SFY2025 Budget allocates a $6.2 billion surplus to the “Rainy Day” fund, a decrease of $2 billion from the SFY 2024 Budget.
New Corporate Transit Fee: The Corporate Transit Fee includes a 2.5% tax on companies in the state making at least $10 million (S-3513/A-4704). This tax will support NJ Transit, which is facing a $766 million financial shortfall, but it will not be allocated to NJ Transit until SFY2026. The tax is retroactive to January 1 and is expected to generate about $1 billion annually before it expires five years after enactment.
Pension Funding: The SFY2025 Budget includes a $7.1 billion payment to fund the Public Workers Pension Fund for the 800,000 active and retired state and local government workers. This marks the fourth consecutive year that a full pension payment was made.
Electric Vehicle Tax Exemption Phase-Out: The SFY 2025 Budget includes a plan to phase out the Electric Vehicle (EV) Tax Exemption (S-3514/A-4702). EV buyers will have to pay a 3.3% sales tax beginning on October 1, 2024. Starting July 1, 2025, all electric vehicles sold will be subject to New Jersey’s sales tax of 6.625%.
Division of Alcoholic Beverage Control: (ABC) is set to receive an allocation of $61.45 million. In SFY 2024 there were 15,000 permits, 9,400 retail licenses, and 1,500 state licenses issued throughout the state.
State Ethics Commission: SFY2025 budget funding for the State Ethics Commission (SEC) totals $1.4 million, an increase of $200,000 over the SFY 2024 allocation of $1.2 million to hire more staff and meet non-salary requirements of the SEC.
Election Law Enforcement Commission: The Election Law Enforcement Commission (ELEC) is set to receive $36.3 million, a 415.25% increase from SFY 2024’s allocation of $5.9 million. The increase can be attributed to improving the Gubernatorial Elections Fund and implementing IT upgrades as required by Daniel’s Law.
Farmland Preservation: New Jersey's Farmland Preservation Program is allocated level funding of $258,000 for SFY 2025.
Green Acres: In the SFY 2025 budget, funding for the Garden State Green Acres Fund is set to remain at the same level as the previous fiscal year, with an allocation of $6.68 million. Funding for the Preserve New Jersey Green Acres Fund is typically provided through a mid-year supplemental appropriation specified by separate legislation.
Blue Acres Flood Remediation: The Blue Acres program is a voluntary buyout program that offers homeowners the option to sell their properties to the state at pre-flood values. Budget funding in SFY 2025 is set at $975,000, a slight increase from SFY 2024.
Brownfields: Level funding of $3.5 million is allocated for the Brownfield Site Reimbursement Fund in the SFY 2025 budget. The Brownfield Remediation Program is allocated 6% of funding from the Corporate Business Tax (CBT).
Water Monitoring and Resource Management: The SFY 2025 Budget sets level funding of $11.8 million for the Water Monitoring and Resource Management program.
Solid and Hazardous Waste Management: The budget includes level funding of $5.7 million for the Solid and Hazardous Waste Management program.
Divisions of Elections: The Division of Elections has an allocation for SFY 2025 of $34.4 million. This includes a Direct State Services allocation of $20.9 million for the division’s operations, which covers the maintenance of the Statewide Voter Registration System, expenses for online voter registration, and early voting. An additional $13.5 million in State Aid is allocated to reimburse County Election Offices for expenses related to mail-in ballots and Election Day services.
Municipal Best Practices List: The SFY 2025 budget continues to include language requiring the Best Practices Inventory, issued by the Division of Local Government Services, for municipalities to receive the total amount of Consolidated Municipal Property Tax Relief Aid (CMPTRA).
One-Time Funding Allocations
The SFY 2025 Budget includes one-time allocations totaling $700 million for various projects.
Contact: Andrew LaFevre, Legislative Analyst, alafevre@njlm.org, 609-695-3481, x116.