On June 22, the Assembly Budget Committee and the Senate Budget and Appropriations Committee passed the FY2022 state budget bill. The budget will now go before the full Senate and Assembly on Thursday, June 24 for a final vote before moving to the Governor’s desk for action.
The FY2022 $46.5 billion state budget maintains no new taxes, tax increases or fees, as the Governor proposed in his original budget proposal.
The budget also includes assistance to the business community with $135 million of COVID-19 relief for businesses, in addition to the $235 million proposed in the Governor’s original budget. Also included is $100 million to expand the childcare credit so residents can return to work.
The budget did not include any federal funds to replenish the state unemployment trust fund, which has paid out billions of dollars in benefits to residents during the pandemic. The CCSNJ noted in our written testimony disappointment that more of the $5 billion tax windfall the state received in recent weeks was not allocated to help businesses restart the state’s economy.
The budget also contains several property tax relief measures, which include a $500 tax rebate, and updating the Homestead Benefit base year to 2017. Other property tax relief measures in the budget are a Child and Dependent Care Credit expansion that it is available for families making up to $150,000 and an extension the Veterans Property Tax Deduction to peacetime veterans.
This budget takes a number of steps to address long term fiscal issues. The budget includes an additional $505 million to the Governor’s originally proposed $6.4 billion pension payment. This is the first time since the 1990s that the state has met its full yearly pension obligation.
The budget also includes a Debt Defeasance Fund which contains $2.5 billion to immediately pay off some of the state’s oldest debt and $1.2 billion to forgo potential debt on new projects. The CCSNJ noted in our testimony that though we support these steps towards taking on the state’s massive debt, we remain disappointed that the state finds itself in a position, having borrowed unnecessarily $4 billion in debt last year, that cannot yet be paid back.
Should you have any questions, please contact Hilary Chebra, Manager of Government Affairs at hchebra@chambersnj.com.
