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Posted on: March 2, 2020

FY 2021 State Budget-Municipal Interest

On Tuesday Governor Murphy proposed a $40.85 billion budget, to govern state spending through the State’s next (FY 2021) Fiscal Year. While we continue our analysis, we wanted to highlight the following areas of interest in the FY2021 Budget Brief that could impact your municipality. Please note that these items reflect the Governor’s proposal, which is subject to change by the Legislature, in discussions with the Administration, and based on public testimony, prior to enactment by the end of June.

Municipal Aid (pg. 17): CMPTRA/Energy Tax Receipts, Transitional Aid, and Highlands Protection Fund remains flat; Pinelands Open Space PILOT’s increased by $3.5 million for a total of $10 million; Meadowlands Tax-Sharing Payments decreased by $4 million. We will, again, ask the Legislature to begin to restore, in the CMPTRA/Energy Tax Receipts distribution, the over $320 million, which the State has used, year after year, since the beginning of the Great Recession, to address other priorities. These funds are supposed to be distributed to local governments, for municipal property tax relief. We will also ask the Legislature to restore Meadowlands Tax Sharing Payments.

School Formula Aid (pg. 13-14): includes $50 million for Stabilization Aid, which will help districts that are implementing plans to adjust to new funding levels determined by the 2018 school funding reform legislation.

Affordable Housing (pg. 18): Allocates at least $60 million to fund affordable housing across the State.

Pre-K to 12 Education (pg. 12): includes $16.3 billion in funding for pre-K to 12 education, which includes direct payments for education pension and health benefits. Expands Pre-k by $83 million in new spending, of which $25 million will be used to assist approximately 30 new districts that are ready to launch programs.

Lead Remediation (pg. 6):  $80 million appropriations to the Drinking Water Program ’a first step of the Administration’s plan to ensure safe and modern water infrastructure.’

Pension Contribution (pg. 10): totals $4.89 billion.

Health Benefits (pg. 10-11): includes $2.8 billion for active and post-retirement medical benefits. The state is claiming it has saved over $500 million in the current year and through “rigorous and ongoing efficiencies in the administration of our health plans and partnerships with labor”, they are expecting to save $800 million in the upcoming year.

Transportation Trust Fund (pg. 19): $2 billion, which includes $1.24 billion for State and local highway and bridge projects; $760 million for transportation projects: and $620 million for pay-as-you-go funding.

Shared Services (pg. 17): level funding of $10 million for Local Efficiency Achievement Program (LEAP)

NJ Transit (pg. 18): Increases the general fund subsidy by $132 million to a total of $589.5 million in funding.

Voting Rights, Election Management: (pg. 33) $16.2 billion, in addition to $9.8 million federal grant, for Election Management and Coordination to “ensure open and fair elections”.

Grants Access (pg. 10): The Administration plans to launch a Grants Management Office, with locations in both Trenton and Washington, to identify funding opportunities for State agencies and local governments, and to provide support for local governments seeking federal and other funding.

Our analysis will continue and we will share more details on more items, as they are made available to us, by the Department of Community Affairs and by the Office of Management and Budget, in the Treasury Department.

Contacts:

•    Lori Buckelew, Senior Legislative Analyst, lbuckelew@njlm.org, 609-695-3481 x112.

•    Jon Moran, Senior Legislative Analyst, jmoran@njlm.org, 609-695-3481 x121.


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