The Legislature on Thursday gave final approval to a $46.4 billion state budget for FY2022, which takes positive steps to reduce state debt and address the underfunded public employee pension system but fails to help employers facing a $1 billion increase in unemployment taxes next month.
The Senate and Assembly listed S-2022/A-5870 on their agendas two days after the bills were quickly introduced and approved by legislative budget committees on Tuesday.
The Senate vote was 25-15 and the Assembly vote was 49-26. The budget bill now goes to the Governor.
NJBIA Vice President of Government Affairs Christopher Emigholz – one of only two people to testify in-person on the bills Tuesday in committee – voiced concerns about the spending plan and the need for amendments.
“There is much to like and much to be wary of with this budget agreement,” Emigholz said. “On the plus side, there is a historic $6.9 billion payment into our underfunded public employee pension system, along with $3.7 billion to address the state’s debt load.
“However, it is concerning that this budget does not address the Unemployment Insurance Trust Fund taxes that are slated to increase significantly on July 1,” Emigholz said. “It is critical that the enormous debt in our UI fund be reduced by using federal funds New Jersey has received under the American Rescue Plan Act. Ignoring this problem, means businesses will be looking at higher taxes on the jobs they provide, which will slow hiring and hurt the state’s economic recovery from the pandemic.”
Emigholz was supportive of the budget plan’s efforts to use some of the federal aid and New Jersey’s record budget surplus to reduce debt, provide some tax relief for middle-income families and seniors and make investments in workforce development, infrastructure and innovation. However, NJBIA is concerned the state will continue its previous pattern of extravagant spending in other areas, he said.
“New Jersey has a bad habit of spending more than it receives in revenue,” Emigholz said. “Our structural imbalance has gone from $4 billion in spending versus revenues in Governor Murphy’s original draft budget to $4.3 billion in the Legislature’s budget bill.
“NJBIA asks that both houses of the Legislature recognize the opportunity before them to use New Jersey’s sizeable surplus – much of which is derived from more than $4 billion in unnecessary borrowing last September – to stop crushing businesses with tax increases.”