New Jersey’s new budget offers strong steps, but more to do

New Jersey’s new budget offers strong steps, but more to do

2022-03-15T13:50:03-04:00March 15th, 2022|Economy, Education, Events, Government, New Jersey|

Writer: Joshua Andino 

Fiscal Year 2023 Budget Address2 min read March 2022 Gov. Phil Murphy highlighted the successes of his administration’s economic policies in the Fiscal Year 2023 Budget Address. More can still be done though, say New Jersey’s business leaders.

The first live address in two years placed property tax relief and affordability concerns at the center of the governor’s agenda. In a state known for its high taxes, a key part of the governor’s address was the Affordable New Jersey Communities for Homeowners and Renters Property Tax Relief Program, or ANCHOR. According to the governor, $1.5 billion in relief would be provided to nearly 1.8 million middle-class and senior homeowners and renters in two years once the program is fully funded. 

New Jersey homeowners with incomes up to $250,000 will get an average of $700 in direct relief, and over 600,000 renters with incomes up to 100,000 will receive up to $250. 

Murphy noted that ANCHOR would not be the only steps taken in the coming budget to address housing affordability, introducing a new $300 million Affordable Housing Production Fund as well. The fund will help to catch up on a backlog of 3,300 approved but yet-to-be-built affordable housing units, all anticipated to be complete by the end of Murphy’s second term. “The Affordable Housing Production Fund will provide real stability for communities. It will ease the burden on municipalities. And it will short-circuit potential lawsuits by developers. But, most importantly, it will get working families into homes,” said Murphy during his address.

The affordability of housing has become a national issue over the last few years for homeowners and renters alike. In New Jersey, home prices increased 12% in 2020 and another 15% in 2021. According to Jeffrey Otteau, a real estate economist and president of the Otteau Group, home prices will rise about 5% in 2022, reports NJ.com

Another highlight of Murphy’s speech was educational funding. Murphy noted that $3 billion more was spent in K-12 education than in the second-term administration of Gov. Chris Christie, and progress continues to be made on this front. Twenty-four percent of the new budget’s total expenditures are direct aid to education, adding another $650 million from the previous budget and bringing the total to $9.9 billion. “The ability to receive a world-class education, on the one hand, and land a rewarding career, on the other, depend upon every child getting a healthy start in life,” stated Murphy.

Responding to the address, New Jersey Chamber of Commerce President Tom Bracken issued a statement inviting the use of American Rescue Plan funds to further speed up the pandemic recovery. “The pandemic has left lingering issues in the business community – capital shortage, labor shortage, and inflation – that we must address if New Jersey’s economy is to experience a full-throttle economic recovery. The budget address was silent on these. The funding to provide the necessary level of help is available with the remaining American Rescue Plan dollars, yet the money sits unused.”

In her own statement, President and CEO of the New Jersey Business and Industry Association Michele Siekerka urged the state to do more to support small-business relief through bill S-733. “With nearly one-third of small businesses shut down during the height of the pandemic and business closings still occurring on a regular basis, these surviving employers, who have seen little in the way of tax incentives, are still very much in need of assistance. One immediate way to help them is to address the nearly $1 billion in unemployment insurance tax hikes that New Jersey businesses are now slated to pay over three years for an unemployment crisis they did not create. This should not be overlooked amid the fanfare of ‘no new taxes’ in the FY23 budget.”