Murphy Signs 3-Month $7.6B Spending Plan

By Jim Pytell, Assistant Editor On Jun 30, 2020

At today’s COVID-19 press briefing, Gov. Phil Murphy announced that he signed a three-month spending plan previously passed by the Legislature that includes cuts and spending deferrals to help the state meet basic obligations through its extended fiscal year which ends on September 30.

The spending plan consists of $7.632 billion and cuts roughly $1.2 billion in previously authorized spending. It does not include nearly $850 million in new spending proposed in the governor’s February budget address.

The supplemental appropriations bill includes a 5% “across-the-board” reduction in funding for non-salary operating costs, a 10% reduction in discretionary grants, and protects services essential to COVID-19 recovery.

“This three month plan can be described in two words: cut, and uncertainty,” Murphy said. “As we move forward toward the nine-month Fiscal 2021 budget, our choices will have an even bigger impact. We cannot just cut our way forward. We must have the flexibility to borrow essential funds to secure the core services we will rely upon as we emerge from this pandemic, and we need direct assistance from the federal government. Absent those, the tough decisions we have made now will pale in comparison to those which lay just around the corner.” 

More specifically, the supplemental appropriations bill includes the following key provisions across various state departments:

• Community Affairs: Delays September payments for Consolidated Municipal Property Tax Relief Aid (CMPTRA) and Energy Tax Receipts (ETR) until October. 
• Education: Continues to implement the school funding formula designed in partnership with the Legislature without any additional funding over FY 2020; delays the September 22nd school aid payment into October; and defers the September school choice payments.
• Health: Provides the same overall funding for hospitals as the first quarter of FY 2020 (Charity Care, Graduate Medical Education); however the distribution may vary because funding will be allocated based on FY 2021 data.
• Labor and Workforce Development: Includes $3.875 million to modernize unemployment processing.
• Higher Education: Maintains tuition assistance programs for post-secondary students—including Tuition Aid Grants, the Educational Opportunity Fund, and Community College Opportunity Grants—at their FY 2020 funding levels. Also includes $52 million in operating aid for senior public higher education institutions and almost $14 million in operating aid for community colleges.
• Transportation: Does not include any state subsidy for NJ TRANSIT due to $1.4 billion in federal CARES Act funding being provided to the agency.  
• Treasury: Does not include Senior Freeze or Homestead Benefit payments and delays the September pension payment into October.

The plan is supported by $8.625 billion in total resources, and ends with a surplus of $956 million through September 30. The revised surplus, which includes the transfer of the entire $421 million Surplus Revenue Fund (Rainy Day Fund) to the General Fund, is up $462 million from the May 22 budget update.

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