Yesterday, the SFY 2025 Budget bill, A-4700/S-2025, was introduced and favorably reported from both the Assembly and Senate Budget Committees. The Legislature is scheduled to consider the $56.6 Billion Budget on Friday.
Energy Tax Receipts
The SFY 2025 Budget includes $805 million for the Energy Tax Receipts Property Tax Relief Aid. The $150 million Municipal Relief Fund that was included in SFY24 to supplement Energy Tax Receipts is not included in the SFY25 budget.
Rainy Day Fund
The SFY 2025 Budget allocates a $6.2 billion surplus to the “Rainy Day” fund, a decrease of $2 billion from the SFY 2024 Budget.
ANCHOR Property Tax Relief
For the third year, 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.
Stay NJ
The Stay NJ Property Tax Credit Program is allocated $220 million for the SFY 2025 Budget. The program is set to begin in SFY 2026. The Stay NJ Taskforce released their recommendations for the program earlier in June. In addition, the Assembly Budget Committee passed legislation (A-4706) revising various statutes to implement recommendations of the Stay NJ Task Force.
Corporate Transit Fee
The Corporate Transit Fee includes a 2.5% tax on the companies in the state that make at least $10 million (S-3513/A-4704).This tax will support NJ Transit, which is facing a $766 million financial shortfall but 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 SFY 2025 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 where 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%.
School Funding
The School Funding Formula is set to receive $11.7 billion, marking the first time it has been fully funded in the past seven years.
One-Time Funding Allocations
The SFY 2025 Budget includes one-time allocations totaling $700 million for various projects.
The League will continue to provide updates as developments continue.
Contact: Andrew LaFevre, Legislative Analyst, alafevre@njlm.org, 609-695-3481, x116.