Since the Legislature is not holding any hearings with the public to go over Gov. Phil Murphy’s latest state budget plan, groups representing the interests of labor, low-income residents, and others organized their own on Thursday without lawmakers.
Billed as a “People’s Budget Hearing,” most of the speakers who participated in the all-virtual event praised Murphy for seeking to hike taxes, including raises for the wealthy and high-earning corporations, to help obviate the need for massive spending cuts amid the coronavirus pandemic.
But there were also several concerns raised about other parts of Murphy’s proposed budget during the event, which was organized by a coalition of interest groups called “For the Many NJ.”
Several speakers called on lawmakers — if any were listening — to work to undo some of Murphy’s proposed budget cuts, including a reduction in operating aid for community colleges. Securing aid for undocumented immigrants who have lost their jobs during the pandemic but cannot receive unemployment benefits was also identified as a priority.
“The Legislature has to do more,” said Dena Mottola Jaborska, associate director of New Jersey Citizen Action, a group that works with and advocates for the state’s low-income residents.
‘We need more recovery for everyone’
“(Coronavirus) is such a major disaster, and we need more recovery, and recovery for everyone,” she went on to say.
Murphy, a first-term Democrat who’s up for re-election next year, has put forward a $32.4 billion budget plan to cover state spending between Oct. 1 and June 30, 2021.
The governor is proposing about $1 billion in tax hikes to help offset projected revenue losses stemming from the pandemic. They include a higher income-tax rate on earnings over $1 million and up to $5 million, as well as increased levies on cigarettes, boat sales and firearms. High-earning businesses would also be asked to pay more under Murphy’s budget.
The governor is asking lawmakers to approve $4 billion in borrowing to help sustain spending, which is on course to increase on a year-over-year basis despite the projected revenue losses. The state Constitution generally prohibits such deficit spending, but it allows for exceptions such as helping the state respond to a war or major emergency.
The proposed borrowing will help fund a roughly $1 billion increase in the state’s contribution to the public-worker pension system, and also allow for more than $7 billion in spending on so-called “formula aid” for K-12 school districts. Murphy’s plan also calls for maintaining a $2.2 billion surplus through the end of June 2021.
Praise for public-worker pensions
Representatives of two of the state’s largest public-worker unions who spoke during Thursday’s event praised the governor for sticking to a pension-funding ramp-up plan even as the state’s finances have been strained by the pandemic. New Jersey has one of the nation’s worst-funded state retirement plans, and the ramp-up plan calls for a $4.9 billion pension payment to be made during fiscal year 2021.
Hetty Rosenstein, New Jersey director for the Communications Workers of America labor union, portrayed the skipping of pension payments in the past as borrowing against the retirements of workers without their consent.
She also urged lawmakers not to make widespread spending cuts or implement other austerity measures in response to the pandemic. She cited the state’s faltering unemployment-benefits processing system as a prime example. A plan to address longstanding claims-processing technology issues that have emerged as a major problem this year was scrapped in the wake of the Great Recession, Rosenstein said.
“We urge the Legislature not to fall into knee-jerk austerity,” she said.
Renee Koubiadis, executive director of the Anti-Poverty Network of New Jersey, suggested the new revenue from Murphy’s proposed tax hikes is needed to sustain spending on programs that assist the state’s most vulnerable populations.
“We risk making the same mistakes that prevented our state from making a full recovery until 10 years after the Great Recession,” Koubiadis said.
Clean-energy and mass transit funds
Among those raising concerns about Murphy’s budget was Doug O’Malley, director of Environment New Jersey. He said the budget would continue to divert funds from the state’s Clean Energy Fund to subsidize operations at NJ Transit, the state’s beleaguered mass-transit agency.
O’Malley called for the establishment of a dedicated source of revenue for NJ Transit — something Murphy himself has advocated for in the past — to prevent the need for such fund diversions.
“New Jersey Transit is in crisis right now,” O’Malley said.
Lawmakers usually hold a series of public hearings after a new budget is proposed to collect the type of feedback that was aired on Thursday. But this year, the entire budget-approval process is being condensed into just five weeks.
Instead of holding public hearings to review Murphy’s budget plan, lawmakers decided to collect only written feedback through Sept. 11.
Thursday’s event had some of the feel of a traditional legislative budget hearing, with time limits on testimony set by the organizers, and issues like school funding and taxes dominating the discussion. But the all-virtual format also brought with it some of the hiccups that have occurred for many as they’ve tried to conduct business remotely during the pandemic, like speakers forgetting to unmute their devices before testifying.
Call for live budget hearings
Still, Christian Estevez, president of the Latino Action Network, said the event shows that a virtual budget hearing can be organized, and that there’s still time for lawmakers to hold one. Under the current schedule, the governor and lawmakers must enact a new budget by Oct. 1.
“I really call on the Legislature to reconsider not having live budget hearings,” Estevez said.
Asked about Thursday’s event, Kevin McArdle, a spokesman for the Assembly Democrats, said lawmakers “welcome all public input” on the budget. He also pointed to accommodations that have been made for sending written budget testimony to members of the Assembly and Senate budget committees, including via traditional mail or email.