A Look at Governor Murphy’s Fiscal Year 2022 Budget Proposal
Against the backdrop of the COVID-19 pandemic and an upcoming election in which the governorship and all 120 seats of the Legislature are on the line, Governor Murphy presented his Fiscal Year 2022 Proposed Budget through a virtual address. Unveiling a $44.8 billion spending plan, the Governor proposed no tax increases, a full payment to the pension system, new initiatives, and a significant surplus.
The Governor estimates total revenue in FY 2022 of $47.2 billion, due in large part to the FY 2021 revenues exceeding projections, which provides an opening balance for FY 2022 of $4.9 billion. The Administration also estimates a 2.4 percent growth in total revenue during FY 2022. Revenues are not based on any increases in tax rates or new taxes and do not account for any additional federal assistance to the State from a new stimulus package.
Total appropriations of $44.8 billion are $3.6 billion more than the prior fiscal year’s, an increase of 8.8 percent. The two largest expenses in the Proposed Budget are pre-K – 12 education ($18.1 billion) and the full Actuarially Determined Contribution (ADC) pension payment ($6.4 billion). These two items by themselves account for 55 percent of the State’s total spending. Other significant appropriations include:
- $2.6 billion to the State’s higher education system
- $2.65 billion for NJ Transit
- $2 billion for the State’s Capital Transportation Program
- $269 million in hospital Charity Care funding
- $218 million for graduate medical education
- $150 million for economic growth initiatives, including the Main Street Recovery Finance Program
The Governor issued the Budget in Brief, which provides a very high level overview of the Budget Proposal, and will publish a full budget in the coming weeks. The Legislature typically begins public budget hearings in March, followed by a presentation from each Department to the Senate and Assembly Budget Committees. Due to the public health emergency, the Legislature heard from only select Departments and provided the opportunity for written public testimony when considering last year’s spending plan. It is unclear at this time what form the legislative review process will take for the FY 2022 Budget.