Treasurer Muoio Highlights State Budget Proposal at NJBIA Event

By Anthony Birritteri, Editor-in-Chief On Apr 27, 2023

This morning, State Treasurer Elizabeth Maher Muoio highlighted Gov. Phil Murphy’s FY 2024 budget proposal that, she said, focuses on affordability, responsibility and opportunity.

Speaking before an audience of business leaders at the New Jersey Business & Industry Association’s “Taxing Your Bottom Line” event held at the Pines Manor in Edison, Muoio said that because of the state’s strong economic turnaround in the pandemic’s aftermath, the Murphy administration has made “important investments that have that propelled us along a fiscally responsible path and have enabled us to fund the critical programs and services that will position New Jersey residents and businesses for future prosperity.”

This includes full payments into the state’s pension system, which in the FY2024 budget, would be the third year in a row that the system would be fully funded. “That is a feat not accomplished in more than a quarter century,” Muoio said. “With this payment, the administration will be responsible for more than nearly three-quarters of all contributions to the system since 1995.”

In the past three years, the state has dedicated more than $20 billion toward funding the pension system, with a record $7 billion proposed in the FY2024 budget.

Muoio also highlighted $10.75 billion for school funding, representing a $2.6 billion increase since 2018, and the $2 billion, second year of funding of the ANCHOR property tax relief program.

For businesses, Muoio said the FY2024 budget “assumes that the temporary 2.5% corporation business surtax, which was extended at the start of the pandemic, will sunset at the start of 2024.” She added that the Murphy administration will continue to work with Legislature to enact revenue-neutral business tax reforms that, among other things, will reduce the rate of global intangible low-tax income (GILTI) tax and adopt the Finnigan method for combined reporting.

The proposed budget also includes a $10 billion surplus, with Muoio explaining that this money will be in preparation for a slowing economy, based on economic reports. “We understand that spending this money is enticing, particularly when there are so many worthy requests,” Muoio said, but she pointed out that, according to data from a recent fiscal survey of states conducted by the National Association of State Budget Officers, the national average of state surpluses is 24.7% of spending, and the median is 26.9%. Meanwhile, the state’s $10 billion surplus represents 18.9% of budget spending.

“We are comfortable with the level of surplus and believe it will help us weather any upcoming storm,” Muoio said, adding that Wall Street has also noted the budget surplus with the recent credit rating upgrades by three major credit rating agencies. In addition to last year’s credit rating upgrades, Muoio said, “These actions have returned New Jersey’s bond rating to levels not seen in nearly a decade.”

Commenting on the current FY2023 budget, the treasurer said that revenues exceeded expectations during the first half of the fiscal year, but they slowed down during the second half. That said, the current revised revenue forecast is $54.1 billion, which is $3.7 billion above the level certified in the appropriations bill, Muoio said.

She added that the FY2024 budget, introduced by the governor this past February at $53.1 billion, is forecasted to have revenues stabilizing at $53.8 billion. This takes into account 2.3% growth in the gross income tax, 1% growth in the sales tax, and a 7.3% decline in corporation business tax revenues.

Muoio said that economic uncertainties still exist as higher interest rates continue to affect the housing market, consumers and the banking industry.

“We all recognize that more work needs to be done,” she said. “As the governor is fond of saying, we are not spiking the football yet, but with the budget proposal put forth this year, the governor has put us on a path to a new future in New Jersey; one that ensures that anyone who wants to own a home, start a business, or raise a family here can afford to do so.”

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