Author: Michael D. DeLoreto

Governor Murphy Proposes the Fiscal Year 2021 Budget

Governor Phil Murphy presented the outline of his spending plan for Fiscal Year (FY) 2021 to the State Legislature on February 25, 2020. The FY 2021 Budget proposes total revenues exceeding $42.7 billion (a 4.3 percent increase from FY 2020), and $40.8 billion in total appropriations (a 2.2 percent increase from FY 2020). An additional $1.6 billion is dedicated for surplus and $300 million is directed into the State’s “rainy day” fund. If enacted as proposed, this would be the largest budget in New Jersey history. One of the biggest expenses is the annual payment to the State’s pension system; a proposed total of $4.9 billion for FY 2021. If funded at this level by the Legislature, the contribution to state pension system would consume 12 percent of all state appropriations. This contribution is still only about 80 percent of what is actuarially required. Additional priorities for the Governor include increases to the state education funding formula by $336 million; another $132 million for NJ Transit; creating the Garden State Guarantee to provide two years of tuition free higher education; funding for lead service line replacements; and expanding eligibility for the Earned Income Tax Credit Program and the Pharmaceutical Assistance for the Aged and Disabled and Senior Gold programs. The Governor proposes to pay for...

Highlights from the Swearing-In of the 219th Legislature and Governor’s State of the State Address

The 219th Session of the New Jersey Legislature started on January 14, 2020 with the reorganization of the Legislature and the Governor’s State of the State Address. Legislative Reorganization The General Assembly welcomed seven new members, with Democrats still retaining a significant 52-28 majority. Speaker Craig Coughlin (D-19) retained his post for another two-year term, as did Majority Leader Louis Greenwald (D-6) and Minority Leader John Bramnick (R-21). The State Senate is also controlled by the Democratic Party with a 25-15 majority. Senate President Steve Sweeney (D-3) became the longest-serving Senate President in New Jersey history, starting his sixth term as leader of the Senate. Senator Tom Kean (R-21) returns as Senate Minority Leader for another term. In their respective speeches, legislative leaders struck similar messages of unity, compromise, and improving the quality of life for all residents. Senate President Sweeney focused on school funding, higher education, water quality, and the need for improvements to New Jersey Transit. Speaker Coughlin and Majority Leader Greenwald highlighted their priorities which included water quality, as well as tax reform and affordability, behavioral health, and food insecurity. Assembly Republican Leader Bramnick took a different approach and specifically addressed cooperation, and condemned hate and violence at all levels. He did, however, put forth a proposal to cap legislative spending increases...

Budget Matters, Incentives, and Cannabis Will Be This Summer’s Hot Topics in Trenton

The Summer is here and the halls of the Legislature are quiet, but three topics that controlled much of the debate in Trenton this year are expected to drag into the Fall: the state budget, economic incentives, and cannabis. Fiscal Year 2020 Governor Murphy signed the Fiscal Year 2020 budget on June 30, avoiding a government shutdown, but not ending the debate on taxes and spending. After the Legislature sent the Governor a budget that did not include a millionaire’s tax, corporate responsibility fee, and tax on opioid manufacturers, the Governor line-item vetoed several appropriations and signed an Executive Order authorizing the State Treasury to place in reserve approximately $235 million in state appropriations. In 2016,Governor Christie took similar action when his Administration froze approximately $100 million in spending as the state health benefit plan design committees considered cost reductions. Prior to the July 4th holiday, the Murphy Administration announced the full list of spending items placed in reserve. The funds will only be released after the Treasurer certifies that certain revenue objectives are met, meaning this issue will linger for several months. Economic Incentives Also on June 30, the State’s two main economic incentive programs, the Grow NJ Assistance Program (GROWNJ) and the Economic and Redevelopment Growth Grant (ERGG) Program, expired and new applications...

NJ Department of Health Issues Alternative Treatment Center Request for Applications

The New Jersey Department of Health issued a Request for Applications today that would license up to 108 Alternative Treatment Centers (ATCs) for the cultivation, manufacturing, and dispensing of medical marijuana. Unlike the currently licensed ATCs, this call for applications does not require a licensee to be vertically integrated. The Department will, instead, issue endorsements for the various functions: cultivation, manufacturing, and dispensary. In total, the Department will seek up to 24 cultivation endorsements, up to 30 manufacturing endorsements, and up to 54 dispensary endorsements. Licenses will still be issued regionally, with up to 38 licenses available in the northern and central region, and 32 licenses in the southern region. The number of endorsements by region is as follows: Northern Region Cultivation endorsements: 8 Manufacturing endorsements: 10 Dispensary endorsements: 20 Central Region Cultivation endorsements: 8 Manufacturing endorsements: 10 Dispensary endorsements: 20 Southern Region Cultivation endorsements: 8 Manufacturing endorsements: 10 Dispensary endorsements: 14 Applications will become available on July 1, 2019 and will be due on August 15, 2019. A pre-submission webinar will be hosted by the Department on July 16, 2019. Please contact us should you have any questions about the endorsement and application process.

Four Things to Watch After Legislature Cancels Votes on Marijuana

To the dismay of advocates and the cheers of opponents, the New Jersey Legislature canceled its scheduled votes on a three-bill package to legalize marijuana for adult use, expand the State’s medical marijuana program, and expunge the records of certain marijuana offenders. For the time being, New Jersey will not become the eleventh state to legalize cannabis for recreational use. But with legislators still committed to moving the issue in the future, here are four things to watch in the coming months. Will the Governor Take Action to Expand the State’s Existing Medical Marijuana Program? Marijuana is legal for medical use in New Jersey, and the State’s medical program has seen a rapid expansion under the Murphy Administration. Under the current framework of the “Compassionate Use of Medical Marijuana Act,” the Governor has the authority to permit more alternative treatment centers (ATCs) in the State, and to continue to expand the list of qualifying medical conditions that marijuana can be prescribed for. Governor Murphy and his Department of Health did a call for applicants in August 2018, and issued permits for six new vertically-integrated ATCs. The Governor expressed his desire to expand the medical marijuana program aggressively if legislation did not move forward. Administration officials have walked back the Governor’s statement in order to focus...

Governor Murphy Presents FY 2020 State Budget

Governor Murphy presented his proposed Fiscal Year (FY) 2020 Budget to a joint session of the New Jersey Legislature on March 5, 2019. His spending plan for the upcoming fiscal year totals $38.6 billion, which is a $1.3 billion increase from last year’s appropriations bill. The Governor’s budget message continued his theme of a “fairer and stronger economy” to make the middle class more secure. He highlighted the recent enactment of a $15 minimum wage, expansion of paid family leave, and the implementation of the state’s paid sick leave law. The Governor also continued his call for greater K-12 education funding and making community college tuition free. The Governor’s proposal for FY 2020, which he described as a “blueprint for the middle class,” is built upon four pillars: Realizing sustainable savings; Stabilizing revenues and increasing creditworthiness; Maintaining and growing investment in education, infrastructure, and innovation; and Addressing affordability. To accomplish these goals, the Governor proposed: Achieving $1.1 billion in savings from public employee health benefit reforms and other departmental savings identified by the Treasury; Increasing the State’s surplus to $1.2 billion; Funding the State’s pension system at $3.8 billion; Reducing the diversion of funds from dedicated sources like the Affordable Housing Trust Fund and the Clean Energy Program; Increasing funding for K-12 education, increasing the...

Here for the Holidays – New Jersey’s Tax Amnesty Program

As a welcome end-of-year present for those with overdue taxes, New Jersey recently launched its tax amnesty program, which began on November 15, 2018 and will end on January 15, 2019. Tax amnesty is available only for State tax liabilities for tax returns due on or after February 1, 2009, and before September 1, 2017. The program offers a waiver of some penalties, Referral Cost Recovery Fees, or cost of collection fees and one-half of the balance of the interest that remains due as of November 1, 2018. My Gibbons colleagues, Peter J. Ulrich and Todd M. Kellert, wrote an article on the Tax Amnesty Program, which you can find here. If you have any questions, please contact us since the program is quickly coming to a close.

NJABC Suspends New Limited Brewery Rules

Less than two weeks after issuing it, the New Jersey Division of Alcoholic Beverage Control (NJABC) has suspended its Special Ruling that imposed new regulations on Limited Brewery Licensees. The Special Ruling released in late September included restrictions on, among other things, special events and entertainment at Limited Breweries. In its announcement, the NJABC stated that the suspension of the restrictions will provide the opportunity to engage in further conversations with craft breweries and other alcoholic beverage license holders about the impact of the Special Ruling. The NJABC is also poised to work with state legislators to determine whether new legislation is needed to update the law that prompted the Special Ruling.

NJABC Issues New Grand Opening Permit, Limited Brewery Rules

The New Jersey Division of Alcoholic Beverage Control (NJABC) has recently issued two notices to the regulated community – the first notice impacting all consumption licensees hosting a Grand Opening event (known as a “soft opening”) and the second impacting the operation of a Limited Brewery. Due to the highly regulated nature of alcoholic beverages and the recent announcement of these rules, licensees should be diligent in their compliance. The Grand Opening Permit authorizes an on-premise consumption licensee to sponsor a one-time private event on the licensed premises at its initial opening. With this permit, the NJABC recognizes that a new licensee may want to introduce itself to certain members of the community through a private event before its opening to the general public. The licensee must maintain a list of all individuals invited and when the invitation was accepted (no same-day invitations or “walk-up” invitees), and the list must be provided to the NJABC within ten days after the event. The licensee can offer an open bar at the event for no more than three hours (unless the permit authorizes differently), and the entire licensed premises must be closed to the public with clear and conspicuous signage that the premises is closed for a private event. The new regulations for Limited Brewery Licensees (those breweries with...

Applications Now Open for Six Additional Alternative Treatment Centers

New Jersey’s Department of Health is seeking applications for six new medical marijuana dispensaries, known as Alternative Treatment Centers (ATCs), to be located in the Northern, Central, and Southern regions of the State. Below is some critical information on the application process which closes on August 31, 2018. Why the Department Needs Additional ATCs The six current licensed ATCs are reaching their limit in terms of the number of patients they can treat. In March 2018, Governor Murphy and the Department added five additional medical conditions to the list of qualifying diagnoses eligible for treatment with medicinal marijuana. Among the conditions were two new types of chronic pain, as well as anxiety, migraines, and Tourette’s Syndrome. Since the addition of these conditions, the program has grown by over 7,000 patients and the total number is in excess of 25,000 people. What the New ATCs Can Do The six ATCs to be licensed will be vertically integrated and allow for the cultivation, manufacturing, and dispensing of marijuana. The Department’s objective is to have two licensees located in the Northern region (Bergen, Essex, Hudson, Morris, Passaic, Sussex, and Warren), two in the Central region (Hunterdon, Middlesex, Mercer, Monmouth, Ocean, Somerset, and Union), and two in the Southern (Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, and Salem). Key Dates...