State Democratic lawmakers are sending clear signals they are ready to rewrite major sections of newly installed Gov. Phil Murphy’s proposed budget, particularly in the areas of taxes and K-12 education funding.
“It’s our job to correct whatever we think is wrong,” said Senate President Stephen Sweeney (D-Gloucester), at a budget hearing yesterday in Glassboro, where residents complained of Murphy’s proposals on K-12 funding.
Lawmakers traveled to the lower half of the state to hear firsthand from South Jersey residents about Murphy’s proposed 2019 fiscal year budget. With fewer big cities and lower population density, communities in South Jersey often have different needs from those in the more urban north. State budget investments can also be more impactful in South Jersey as the region is less populated and has fewer options for higher education.
Residents raised issues that were most pertinent to those in the southern half of the state — including the state’s role in open-space protection and the need for more investment in the higher education institutions in the area, like Rowan University and Rutgers-Camden. But for the most part, lawmakers heard concerns that are proving to be universal across the state this year — Murphy’s new proposals on taxes and K-12 funding.
Problem with school aid
Much of the testimony centered on the way the governor is proposing to distribute a boost in school aid that’s in his budget — and how lawmakers from both parties are already sketching out their own plans for it. That continued a theme that has played out in recent days at other legislative hearings.
In all, Murphy’s $37.4 billion budget for fiscal 2019 would increase state spending by nearly 8 percent compared to the budget for the current fiscal year, which was enacted by former Gov. Chris Christie last July. A major chunk of the increase would go to the grossly underfunded public-employee pension system, while direct state funding for K-12 education, known as “formula aid,” would also be increased by nearly $284 million. Other funding increases are planned for public preschool, college-tuition assistance programs, and New Jersey Transit.
Parents and administrators from several South Jersey school districts urged lawmakers yesterday to give them more funding than Murphy has proposed to help them keep pace with rising enrollment. Among them was James Lavendar, the superintendent of the Kingsway district in Gloucester County. Under Murphy’s budget plan, nearly all districts in the state get added funding, but not enough to resolve the unevenness that has occurred due to years of underfunding by Christie, and an inability to address growing versus dwindling populations, and the impacts on the economy. It also does not adopt funding revisions that Sweeney pressed for last year in tough budget negotiations with Christie; Lavendar said his district is due to receive about 50 percent of the aid that it should be getting if the school-aid law was fully funded by Murphy.
“This is no stronger and fairer New Jersey, I will tell you that right now,” Lavendar said as he mocked the campaign slogan Murphy used repeatedly during the 2017 gubernatorial contest.
“The state government is saying to my community, ‘You live in South Jersey, and we’re going to turn around, and we’re going to take your tax dollars and we’re going to give them to overfunded districts in the north,’” added James Mueller, president of Kingsway’s Board of Education.
‘…begging for your help’
Meanwhile, in Chesterfield in Burlington County, which is also considered “underfunded” according to the provisions of the school-aid law, the local school district is due to receive a meager $41,000 in Murphy’s budget plan.
“Here we are again, begging for your help,” said Andrea Katz, a member of the Chesterfield Township committee.
In response, several lawmakers made it clear they do not see eye-to-eye with the governor when it comes to the distribution of school aid, as some communities are due to receive increases that don’t appear to be justified by enrollment figures.
Sarlo: ‘We will fix that inequity’
“We will fix that inequity in the final budget,” said Paul Sarlo (D-Bergen), chair of the Senate Budget and Appropriations Committee.
“This is totally unacceptable,” said Sen. Sam Thompson (R-Middlesex).
To help pay for increased spending, Murphy is planning to hike several taxes, including the income-tax rate levied on earnings over $1 million. He also wants to restore the 7 percent sales-tax rate that up until recently had been in place for over a decade.
Christina Renna, vice president of the Chamber of Commerce-Southern New Jersey, and other representatives of the business community raised concerns about the impact the tax hikes could have on small businesses. Sweeney, the Senate leader, has already aired his own misgivings about the tax-hike proposals, and Sarlo suggested the tax-policy discussions will largely be put on hold until after lawmakers get a full update on state revenue collections from the Department of Treasury in May.
Tax hikes a ‘last resort’?
“There are members on both sides of the aisle who have said (tax hikes) are the last resort,” Sarlo said. “I’m not guaranteeing that they won’t be a part of the budget, but I think we all agree, let’s get those May revenue projections first before we move to that.”
Local concerns were also raised at yesterday’s hearing. Phoebe Haddon, chancellor of Rutgers University-Camden, praised the state’s funding of tuition-assistance grants and the New Jersey Educational Opportunity Fund. She said those programs have helped her school increase enrollment significantly among the region’s minority populations.
“We’re a national model for accessibility,” Haddon said.
Joseph Venezia, the mayor of Estell Manor in Atlantic County, urged lawmakers to help his community offset a loss of tax revenue that has occurred after more than 5,000 acres of land was preserved by the state, in part to protect the region’s source of drinking water.
“This is a fairness issue,” Venezia said. “Your keep taking away our revenue sources.”
Renna, for her part, stressed the need for lawmakers to craft economic policies that help businesses in South Jersey compete on an equal footing with those in neighboring Delaware and Pennsylvania.
“Businesses in Southern New Jersey face stiff competition from these states that are only a bridge away,” Renna said.