Following final legislative approval of a record $56.6 billion Fiscal Year 2025 state budget (Assembly Bill 4700/Senate Bill 2025), Gov. Phil Murphy was set to enact the spending plan late June 28.

“We’re going to create new economic opportunities for our workers and our local businesses – and we are going to invest in the potential of every one of our neighbors, from our students to our senior citizens,” Murphy said following passage of the budget. “But above all, this is a budget that will put the needs of our families ahead of the wants of special interests.”

The budget season has been marked by the debate over a new 2.5% corporate fee – which the business community has criticized – to fund NJ Transit. That legislation (S3513/A4704) passed both chambers Friday.

The home stretch of the budget was once again marred by a rushed, chaotic process with budget committee members only seeing the more-than-370 page bill a few minutes before voting to advance the legislation for Friday’s full vote. The bill was not posted for public consumption until Thursday. When asked about that process by reporters Friday, Murphy acknowledged the last stretch craziness – but stressed that more than 95% of what he proposed back in February is in the final spending plan.

Critics of the spending plan have blasted that aspect of the process – as well as more than $700 million in late, add-on appropriations, the loss of school aid in several districts – despite a full-funding of the S2 formula, and the structural deficit the state is running.

But Democratic leaders point to what is in the spending plan – touting another full pension payment, record school funding through that full formula funding, a $6.5 billion surplus, property tax relief programs (ANCHOR, Stay NJ), the now-dedicated funding source for NJ Transit (the CTF), and more.

“All together, this budget will provide a robust foundation for us to continue building a New Jersey that is stronger and fairer than ever before,” said Murphy. “A state where every family has a fair shot at a brighter future – and every child receives the support they need to chase their dreams. This budget is a testament to what we can achieve when we turn down the noise in our political conversation and come together in support of our shared values. Because together, in partnership with the leaders here today, we are investing in the future of every New Jerseyan in every community.”

“We are putting in place a fiscally responsible state budget that addresses the needs and priorities of the people of New Jersey. It meets the state’s obligations and supports the initiatives that will move the state forward and improve the quality of life for all New Jerseyans,” said Senate President Nick Scutari, D-22nd District; Senate Majority Leader Teresa Ruiz, D-29th District; and Senate Budget Committee Chairman Paul Sarlo, D-36th District, in a joint statement on behalf of the Senate Democrats.

“This budget makes historic investments in schools, sustained property tax relief, health care and transportation – all while maintaining our commitment to fiscal responsibility with a healthy surplus,” said Assembly Speaker Craig Coughlin, D-19th District, who noted appropriations for the ANCHOR and Stay NJ property tax relief programs. “New Jersey will be the best place in the country to find a job, a home, and a vibrant future for a family – from pre-school to retirement.” 

Republican response

Meanwhile, Republicans expressed dismay about the process and outcome.

“Throughout the FY 2025 budget process, Republicans presented numerous proposals to improve both the process and our state’s affordability crisis, yet we were consistently denied a seat at the table,” Senate Republican Leader Anthony Bucco said in a statement on behalf of the Senate GOP. “As this budget imposes additional taxes, fees, and fare increases on our residents that will undoubtedly raise the cost of living and make the Garden State more unaffordable, no one can point the finger at Republicans – this is solely on the shoulders of our Democratic colleagues.”

“If our input and proposals were seriously considered, I am confident that the process and final budget would look much more optimistic,” Bucco stressed closing his statement.

What business leaders are saying

Top state business leaders who have opposed this budget weighed in as well.

“While we always try to find the positives in a state budget, the unfortunate fact is this spending package is overwhelmingly bad for our job creators, for our taxpayers, and our overall fiscal responsibility,” said New Jersey Business & Industry Association President and CEO Michele Siekerka in a statement. “We are raiding a debt defeasance fund while we have a surplus. We have a structural deficit, but we have $700 million in discretionary spending and a damaging, yet unnecessary $1 billion business tax that will stymie economic growth and jobs – and make our state less affordable.”

Siekerka said what’s more concerning is the apparent lack of appreciation and consideration of the state’s employers and business community.

“We truly do understand that Gov. Murphy and the Legislature have many constituents to answer to and there are a lot of issues in this state. Theirs is not an easy job. And we also greatly appreciate those who stood firm and voted ‘no’ on this tax,” said Siekerka. “But what are New Jersey employers to think when they are not only continually overburdened and overregulated, but also misled by policy statements that don’t stick – without any apparent remorse?”

“The budget battle is over. We now have to live with the consequences,” said Tom Bracken, president and CEO, New Jersey Chamber of Commerce. “We are hoping that all the constructive dialogue we have had with the administration and the Legislature over the past months will open the door for more productive discussions in regard to our economy – and support for the business community.”

“This budget makes New Jersey less competitive compared to our neighbors in Delaware and Pennsylvania. South Jersey has already seen two confirmations of companies leaving the state, one of which is moving across the river to Pennsylvania, and we are concerned that this trend will continue with the passage of this budget and Corporate Transit Fee,” said Hilary Chebra, manager, Government Affairs, Chamber of Commerce Southern New Jersey. “The CCSNJ stands ready to work with the Legislature to work to ensure that South Jersey receives its fair share of investment from the corporate transit fee.”

When asked about the CTF and the backlash from the business community, Murphy said that is a lever that is not pulled happily.

“We have one of the most thriving business communities of any American state. But you saw the drama that played out in New York City, in New York State with the MTA – where they were going to rely on third parties, essentially, to solve their fiscal challenge in the transit system,” said Murphy. “All of us committed that we wanted to solve our problems within our four walls – and sometimes that’s not pain-free.”