Governor Murphy Signs the FY2023 Budget
On June 30, Governor Phil Murphy was joined by Senate President Nicholas Scutari, Assembly Speaker Craig Coughlin, Senate Budget Chair Senator Paul Sarlo, Assembly Budget Chair Eliana Pintor Marin, and the Mayor of Cranford Kathleen Miller Prunty in Cranford for the signing of the FY2023 budget.
After Mayor Miller Prunty’s introduction, Governor Murphy, Senate President Scutari, Speaker Coughlin, and budget chairs Senator Sarlo and Assemblywoman Pinto Marin noted their appreciation for the Legislature’s efforts in coming to a final budget that features the ANCHOR Property Tax Relief program as well as investments in education.
FY2023 Budget Overview
The FY2023 Budget Appropriations Bills (S-2023/A-4402) were favorably released from both the Senate Budget and Appropriations Committee and the Assembly Budget Committee, respectively, along party lines on the evening of June 27. Approved by both houses on June 29 and signed by Governor Murphy on June 30. The Appropriations Bill includes $649 million for Consolidated Municipal Property Tax Relief Aid (CMPTRA), $863 million for Energy Tax Receipts (ETR) allocations, $6.8 billion for pension payments, and $900 million for the newly created ANCHOR program.
Energy Tax Receipts Funding
On Monday, June 27, League staff and Mayors from around New Jersey met with Assembly Speaker Craig Coughlin to discuss the restoration of $331 million in funding for municipal energy tax receipts. Assembly Speaker Coughlin noted that discussions among legislators regarding the restoration of these funds. The appropriations bill includes an additional $75 million in allocation of energy tax receipts funding known as Municipal Relief Fund.
The FY2023 budget states that the funding appropriated for the Municipal Relief Fund will be distributed to municipalities on the same schedule and in amounts proportional to the Energy Tax Receipts Property Tax Relief Aid, including amounts transferred from CMPTRA to the ETR Property Tax Relief Aid account.
This year’s budget includes an allocation of $6.8 billion for the New Jersey pension system, which will be allocated on a quarterly basis. The pension payments will be made based on the following schedule:
A minimum of 25% of the full pension payment by September 30, 2022.
A minimum of 50% of the full pension payment by December 30, 2022.
A minimum of 75% of the full pension payment by March 31, 2023.
100% of the pension payment by June 30, 2023.
The budget also states, the pension payments can be reduced by any increase in the interest on tax and revenue anticipation, if the need to borrow more money for the purpose of making the scheduled quarterly payments.
This year’s budget provided an investment of $305 million that will fully fund the Affordable Housing Protection Trust Fund (AHPF). This allocation will create over 3,300 new affordable housing units across the state. AHPF will allow for the completion 100% of affordable housing projects identified in the municipal affordable housing settlements.
The AHPF allows for the creation of 1,700 new homes for families, more than 1,100 new homes for senior citizens and nearly 550 new homes for individuals who need community support.
Lead Pipe Replacement
The FY2023 budget includes $97 million for lead service line replacement for residents. This investment will allow the state to continue to help replace old lead water service lines that will help protect public health and improve the delivery of reliable water to residents and businesses of New Jersey.
Municipal Best Practices
The FY2023 budget continues to include 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). For the full list of municipal best practices, please visit DLGS best practices web page.
Over $2 billion has been appropriated to the newly created ANCHOR Property Tax Relief Program. The ANCHOR program is expected to benefit more than 1.15 million homeowners, double the amount under the Homestead Benefit, and more than 600,000 renters, all of whom are currently excluded from the Homestead Benefit.
With the passing of the FY2023 budget, the benefit amount will increase over the next three years and is based on income level. Homeowners earning up to $250,000 a year will receive an average benefit of nearly $700 in FY2023, growing to $1,150 by FY2025. Renters earning up to $100,000 will receive a yearly benefit up to $250.
Contact: Andrew LaFevre, Legislative Analyst, email@example.com, 609-695-3481, x116.