Governor Shows Off Another Benefit of His Bigger Budget

Murphy highlights more money for Educational Opportunity Fund in his spending plan and doesn’t retreat from higher taxes despite lawmakers’ hesitancy

State Sen. Sandra Cunningham (D-Hudson) with Gov. Phil Murphy
While key lawmakers have yet to embrace several tax hikes that are part of Gov. Phil Murphy’s state budget plan, that’s not stopping the governor from holding events to show off how the state could benefit from increased spending.

The first-term Democrat was back on the stump for his budget yesterday, leading a roundtable discussion at New Jersey City University that highlighted his plan to increase spending on higher education initiatives, including the Educational Opportunity Fund and tuition-aid grants.

The event featured college students speaking about their experiences with the EOF program, which provides personal support and financial aid to thousands of low-income students. Many of the students said they are on course to graduate and begin working in fields like forensics and public service.

“You are great examples of, it’s not abstract, it’s changing your life,” Murphy said.

The roundtable was just the latest Murphy event aimed at demonstrating ways the higher spending that his fiscal year 2019 budget calls for could impact the state; similar events in recent weeks have highlighted proposed budget increases for New Jersey Transit and community-college student aid.

Some in, some out

The focus on the EOF program highlighted one budget add-on that lawmakers fought for last year and that made it into the final draft of Murphy’s spending proposal, even as many others were cut out. The event also showcased spending that remains in Murphy’s budget for four-year colleges and universities, despite questioning by some whether he’s overemphasizing a push for free community college in New Jersey.

In all, Murphy’s $37.4 billion fiscal year 2019 budget would increase spending by nearly 8 percent compared to the budget then-Gov. Chris Christie signed into law last July, with much of that increase backed by a series of tax hikes. They include establishing a 10.75 percent income-tax rate for earnings over $1 million and reinstating a general state sales-tax rate of 7 percent.

While the governor’s budget proposal does not contain an increase in operating aid to the state’s four-year colleges, funding for the Tuition Aid Grant program for college students would be increased by $7 million, to $432.8 million. The EOF program would get a $1.5 million boost in funding, up to $45.3 million.

First funded in 1968 under former Gov. Richard Hughes, the program currently provides more than 17,000 students with both counseling and scholarships, typically starting before the students even enroll. Its success stories reach across the state, including in the Legislature itself, with several lawmakers among those to successfully complete the program and graduate college. During the roundtable yesterday, Sen. Sandra Cunningham (D-Hudson) said the value of the counseling and mentoring provided through the program is often overlooked. “That’s very important, and that’s the nicest thing about EOF,” she said.

Reversing a Christie practice

Cunningham and other lawmakers have fought hard in recent years to protect funding for the program, using legislative add-ons inserted into the annual budget to reverse a practice followed by Christie, a Republican, that involved reducing the EOF line-item back down to a baseline amount each year.

This year, Murphy decided to keep the legislative add-on for EOF funding in his fiscal 2019 budget plan, while also devoting some additional money to the program. But not all legislative add-ons survived the final cut, even though some were top priorities for lawmakers from Murphy’s own party. In all, nearly $125 million out of a total of $190 million worth of add-ons were removed by Murphy. The subtractions included $5 million for a prisoner re-entry organization that is run by former Democratic Gov. Jim McGreevey.

Lawmakers pressed state Treasurer Elizabeth Maher Muoio to explain during public hearings last week why some add-ons made it into the final budget and some did not, with some of the lawmakers suggesting it made it appear the governor was playing favorites. But Muoio cited the state’s very strained financial position as a reason for his selectivity.

“There were many tough decisions made in this budget just because of the fiscal constraints we face,” she said. “Typically, all of the legislative adds are backed out each year. The governor looked over them and funded what he could.”

Muoio went on to say Murphy will be “willing to discuss priorities” with lawmakers as budget talks move forward.

But exactly how much money will be available for Murphy and lawmakers to spend in fiscal 2019, which starts July 1, remains an open question, as key Democratic leaders have yet to embrace Murphy’s call for tax increases. In fact, even as Murphy and lawmakers have seemed to make some progress on disagreements over the distribution of K-12 education aid in recent days, Senate Budget and Appropriations Committee Chair Paul Sarlo (D-Bergen) said earlier this week that doesn’t mean they’re seeing eye to eye just yet on taxes.

“Clearly, that’s a separate discussion,” Sarlo told reporters in the State House.

Asked yesterday in Jersey City about the lingering hesitation among lawmakers to hike taxes, Murphy didn’t back down. He said he remains hopeful they will be able to reach an agreement on taxes as the budget process moves forward.

“I’m very optimistic that we’re going to find common ground,” Murphy said.