NJ Budget Update: Governor Murphy Strong Start for Education and Transit


New Jersey Governor Phil Murphy announced his first budget last week week, with some good news for those eager for greater investment in infrastructure, education, cities, and the environment.

In his $37.4 billion budget, the Governor pledged to triple funding for NJ Transit — bringing the new total to $242 million. This is welcome relief for riders frustrated by delays, canceled trains, and poor communication; however, it is widely-acknowledged that it will take time to recover from the damage done by years of cuts and mismanagement by the previous administration. Murphy did not mention the Gateway Tunnel.

Governor Murphy also proposed a restoration of the sales tax, back to seven percent, which reverses a  deal Governor Chris Christie had made with Democrat lawmakers to finance the Transportation Trust Fund. New taxes on app-based ride hailing companies like Uber and Lyft, and home sharing service Airbnb, were also included.

A new millionaire’s tax, with a 10.75% tax rate on incomes over one million, would raise over $760 million, but remains controversial in the Legislature. Lawmakers who are worried that the tax will cause the very wealthy to leave the state should consider findings from top researchers at Stanford University, showing that  migration rates resulting from millionaires taxes are so small they are not statistically significant.   

Governor Murphy’s budget also includes $60 million in income from recreational marijuana sales, a proposal which still needs approval from the Legislature. Legalized marijuana has successfully raised revenue for a variety of needed programs in Colorado and Washington state.

Under his proposal, 94% of school districts in New Jersey will see more funding. His budget also allocates funding to expand Pre-K and is taking the initial steps toward free community college for all New Jersey residents.

The Governor also promised to increase the minimum wage to $15 per hour, and to add $5 million to the Neighborhood Revitalization Tax Credit,which helps nonprofits and businesses invest in distressed urban neighborhoods.

The budget was light on addressing affordable housing directly, though obviously greater investment in schools, higher wages, and new revenues will help improve lives for New Jersey residents struggling with high housing costs. In a statement, the Housing and Community Development Network of New Jersey  praised the plan as “moving in a new direction.”

“Too many NJ families, seniors, and residents living with special needs struggle daily to make ends meet, said Staci Berger, CEO HCDNNJ. “We commend Gov. Murphy for acknowledging this hardship and the impact it has had on our economy.”

When it comes to protecting the environment, Governor Murphy is focused on restoring clean energy spending in New Jersey. $5 million will be reallocated from the Clean Energy Fund and dedicated to the Energy Savings Improvement Program (ESIP) in order to to support necessary energy efficiency projects in State government. And with New Jersey’s re-entry into RGGI, the Department of Environmental will also receive more support for environmental justice initiatives.

Governor Murphy’s budget illustrates that he is committed to making some necessary changes across many fronts. We commend his commitment to ensuring that schools get the funding that they deserve, and to turning around NJTransit to make it work better for the thousands of commuters who depend on it. commuters are able to travel safe and soundly day after day.


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