Lawmakers take up state budget process with first in series of hearings

The state Senate took the stage Tuesday in the annual drama that is the often tortuous process by which Trenton produces a budget for the coming year, three weeks after Gov. Phil Murphy pitched a spending plan that tops $40 billion.

Meeting in Newark on the campus of NJIT, the Budget and Appropriations Committee of the upper house held the first in a series of hearings that are the preamble for the Legislature formulating its response to the governor. Tuesday’s testimony will help shape a bill formally appropriating all of the tax dollars and other government revenues that the state will spend in the fiscal year that begins in July.

Tuesday’s hearing gave the public a chance to weigh in, with a series of speakers from advocacy groups in the state each getting three minutes to press the case for their particular cause.

And as a surprise to no one, the always controversial topic of Trenton’s support for public schools and the school funding formula was a major point of discussion.

“When we look at overfunding to some districts, about one-third in the state, and underfunding about two-thirds, that means we have the haves and have-nots,” said Chris Fay of the Fair Funding Action Committee. “All we’re asking for is that all districts get to 100%.”

Murphy’s $40.85 million spending plan increases spending by 5%, in boosts for NJ Transit, tuition assistance for college students and aid to public school districts. The first-term Democrat also proposed a series of tax hikes, including a renewed call for a higher income tax rate on earnings between $1 million and $5 million, the so-called true millionaire’s tax that legislators have twice rejected.

Public school advocates say that, even with the governor’s $300 million boost, schools are falling $1 billion short of what they should get under the funding formula.

Advocates for special needs students asked lawmakers to re-up funding for supplemental learning programs, and to fulfill the governor’s request to hike aid for those with developmental disabilities.

“There’s over 144,000 students in New Jersey today who have special-education classifications that would qualify them for this service,” said Edward Bray, director of public policy and advocacy with the nonprofit Learning Ally. “This funding provides those students a bridge. It gives them the tools they need to be able to access their curriculum.”

Sheila Reynertson, an analyst with the progressive think tank New Jersey Policy Perspective, pointed to the threat of a recession amid the coronavirus outbreak as one reason not to raid the state’s reserves. She advocated for the lawmakers to pass Murphy’s millionaire’s tax.

“The coronavirus might be gone by summer, but the U.S. economy might not be back in full swing at all,” she said. “So we want to see New Jersey take a proactive stance and ensure those who will be hit hardest by the recession are protected.”

State Sen. Paul Sarlo, the chairman of the Senate budget panel, who has been among Murphy’s fellow Democrats in the Legislature who have sparred with the governor on the proposal and other major policies, reiterated his reservations.

“Any broad-based taxes need to be a last resort,” he said. “I’ve always said that and I say it every year.”

Sarlo said he believed the economy faces downward pressure, both from the coronavirus outbreak and from the likelihood that a market correction is due in the long term.

Murphy’s calls for new taxes, including a big bump in the cost of a pack of cigarettes and a “responsibility” levy on corporations that don’t offer health care plans, is not flying with representatives of the state’s business community.

“We can’t afford a budget that relies on over a billion dollars in new taxes,” said Christopher Emigholz, vice president for government affairs of the New Jersey Business and Industry Association. “We think it’s important to focus on spending efficiencies and spending cuts.”

New Jersey is already ranked worst in the nation in all four broad-based taxes that make up the bulk of government spending, Emigholz testified.

“Right now the national economy, the world economy is in a state of flux,” he said. “That recession we’ve all been worried about is looking more and more likely to come soon. We can’t afford new taxes. We want to see government cuts instead of biz cuts because that means less jobs.”

Tuesday’s hearing was the first of four scheduled by the two houses of the Legislature to gather public input. The lawmakers will then hold sessions with the leaders of government departments and then turn to developing the appropriation legislation for FY2021.

A budget must be in place, and signed by the governor, by July 1.

Here is the schedule for the remaining public hearings:
• March 12, 10 a.m., Senate Budget and Appropriations Committee, Rowan University, Rohrer College of Business, Business Hall, 271 Mullica Hill Road, Glassboro;
• March 18, 9:30 a.m., Assembly Budget Committee, State House Annex, Committee Room 11, 125 West State St., Trenton;
• March 25, 9:30 a.m., Assembly Budget Committee, State House Annex, Committee Room 11, 125 West State St., Trenton.