The COVID-19 pandemic loomed large in Gov. Phil Murphy’s budget presentation Tuesday and the state has already committed $2.4 billion in federal emergency funding to support schools, assist vulnerable residents, help state and local governments pay workers and cover other coronavirus costs.
But identifying new pandemic-specific spending for the coming budget year is more difficult.
Murphy noted the impact of COVID-19 is now declining in New Jersey and framed his $44.8 billion spending proposal for the fiscal year which starts in July as an opportunity to rebuild the state in ways that make it “stronger and fairer,” particularly for those devastated by the pandemic. The budget proposal, which must be reviewed by the Legislature, comes as Murphy and the state’s 120 lawmakers face reelection this fall.
Since last March, more than 772,000 cases of COVID-19 have been diagnosed in New Jersey and nearly 23,000 people have died. Certain groups — like Black and brown residents and the elderly — are particularly at risk for infection, hospitalization and death, due to high rates of pre-existing conditions and greater potential for exposure.
“Even though we make strides every day, we know this pandemic is not done with us, and the emergence of new variants means we must remain vigilant,” Murphy said in his budget speech Tuesday, delivered in a video recorded in an empty theater. “But even as we continue to confront the pandemic’s challenges, we cannot — and we will not — allow our state to sit still. We won’t allow New Jersey to be pulled backward. This is the time to look ahead,” he said.
Brightening fiscal picture
Details of the proposed budget released Tuesday highlighted programs Murphy has already funded with the $5.6 billion New Jersey received in 2020 through federal COVID-19 relief measures. The current $32.4 billion budget, which covers nine months, includes $2.39 billion in coronavirus aid; economic fallout from the pandemic led Murphy to push for a three-month “extension” to the previous fiscal year, moving the traditional June 30 budget deadline to Oct. 1.
Most of this money has already been expended, the budget details released Tuesday noted, and the administration is awaiting federal guidance before making spending adjustments or allocating more to these programs.
New Jersey’s public revenue picture has brightened significantly since then and the state could also be in line to receive another big infusion of federal relief thanks to a nearly $2 trillion aid bill that’s being discussed in Washington, D.C. But for now, Treasury officials have not incorporated any additional coronavirus aid into their spending plans for the 2022 fiscal year, citing the uncertainty surrounding the ongoing negotiations at the federal level.
Much as they were used this year, Murphy’s new budget plan would direct $626 million of those already allocated federal funds for education-related programs, more than $260 million for small businesses, and more than $800 million for increased state expenses, like IT investments in the health department and unemployment system. It also includes $490 million for the state to pay direct care providers and public safety personnel.
Millions of dollars in state funding is also slated for initiatives like housing aid, small business loans and hospital support, designed to help residents recover from the pandemic’s impact. State officials highlighted some $200 million in spending targeted to economic recovery, which would be distributed through various agencies and councils to boost Main Street businesses, urban redevelopment, mass-transit projects and other initiatives, with a focus on Black and Latinx-owned companies.