Final FY 2019 Budget
At $37.4 billion, the final version of the FY 2019 budget will spend the exact same amount of money that Governor Murphy called for in March, when he put forward his original budget plan. The highlights for higher education include:
- Twenty-five million dollars in new aid for community college students - a top priority for the governor, who asked for $50 million in his original budget proposal. Twenty million dollars will go for grants to students with a family income cap of $45,000; these will be "last-dollar grants." Five million dollars is allocated for a planning grant to the community colleges to develop a strategy for implementing a free community college initiative;
- Increases in government-funded positions for some public higher education institutions (Stockton University, Thomas Edison State University, Rowan University) over what Governor Murphy originally proposed in March; and
- Several special funding grants including: $1 million for Thomas Edison State University's (TESU) expenditure on National Guard Tuition Waiver Reimbursement; $800,000 for College Bound/GEAR-UP Program at New Jersey City University (NJCU); plus several million dollars for programs at Rowan and various Rutgers campuses (see below).
Also making it into the final budget is $242 million in additional aid for New Jersey Transit that Governor Murphy included in his original budget, and another combined $400 million in additional K-12 and pre-K education dollars. The drama that could have led to the government shutdown concerned the revenue sources. After the budget deal was reached, the governor had to give up his pitch for a true millionaire’s tax, deciding instead to accept the establishment of a ‘pentamillionaires’ tax — a higher state income-tax rate that will be levied on earnings over $5 million. Gone is the restoration of a seven percent sales-tax rate, which the governor had wanted. The governor was forced to accept lawmakers’ call for a higher corporate-tax rate, and to allow for a tax-amnesty program that has the potential to create a $200 million hole in next year’s budget.
The final budget included the following increases over last year and/or over what the governor initially proposed in March, 2018:
- $1.5 million - The Educational Opportunity Fund (EOF);
- $25 million - Community College Opportunity Grant ($20 million for scholarships; $5 million for planning grants);
- $7 million - the Tuition Aid Grant program;
- $1 million Thomas Edison State University - National Guard Tuition Waiver Reimbursement;
- $800,000 New Jersey City - College Bound/GEAR-UP Program;
- $2 million Rowan University - Center for Research and Education in Advanced Transportation Engineering Systems;
- $500,000 Rowan University/Cooper/Coriell Institute - Camden Opioid Research Initiative;
- $3 million Rutgers Camden Board of Governors/Rowan University - Rutgers Camden School of Business Facilities Development;
- $2.5 million Rutgers New Brunswick - Engineering Information Technology Expansion Initiative;
- $170,000 Rutgers-Camden - Student Mental Health and Wellbeing;
- $500,000 Rutgers-Camden - Planning for Future Growth;
- $1.25 million Rutgers Newark - Scholarship and Transformative Education in Prison Program;
- $3.7 million New Jersey Institute of Technology - Medical Devices Innovation Cluster;
- $267,000 Rutgers New Brunswick - Eagleton State Government Science and Engineering Fellowship Program;
- $2.5 million New Jersey Agricultural Experiment Station;
- State-Funded Positions - 305 for Stockton University; 95 for Thomas Edison State University; 205 for Rowan, including Rowan/Cooper;
- Cancer Institute of New Jersey - University Hospital Cancer Center Services: additional $1 million for this purpose: "expansion of National Cancer Institute - designated Cancer Center services at University Hospital in Newark to attract clinical trials and advanced cancer care and prevention strategies to the Greater Newark Area with the goal of ensuring parity among cancer patients, including the underserved and underinsured populations."
- Hackensack Meridian School of Medicine at Seton Hall University: an additional $4 million;
- Cooper Medical School - Cooper University Hospital Support: additional $5 million (governor had proposed $16.297 million, legislature provided $21.297 million).
- Language prohibiting the New Jersey Higher Education Student Assistance Authority from membership in the National Council on Higher Education Research. Official language says: "The amounts hereinabove appropriated for Student Assistance Programs are conditioned to the following: the Higher Education Student Assistance Authority shall expend no funds for the purpose of joining or paying membership dues to the National Council of Higher Education Resources."
|Operating Aid to the Senior Public Colleges and Universities: Grants-in-Aid General Fund|
These dollar figures include the special grants outlined above; some are new initiatives, others are restoration of funding that the governor removed in his March 2018 budget proposal
|Institution||Final FY 2018 Appropriation||Final FY 2019 Appropriation||Difference|
|The College of New Jersey||$27,177,000||$27,177,000||$0|
|New Jersey City University||$24,154,000||$24,954,000||$800,000|
|Thomas Edison State University||$4,292,000||$4,292,000||$0|
|William Paterson University||$30,357,000||$30,357,000||$0|
|Public Research Universities|
|Rutgers University - New Brunswick||$325,922,000||$328,689,000||$2,767,000|
|Rutgers University - Newark||$30,630,000||$31,880,000||$1,250,000|
|Rutgers University - Camden||$21,501,000||$20,001,000||($1,500,000)|
|Agricultural Experiment Station||$20,931,000||$23,430,000||$2,500,000|
|New Jersey Institute of Technology||$45,440,000||$39,140,000||($6,300,000)|
|Montclair State University||$35,859,000||$35,859,000||$0|
Independent Colleges and Universities
The independent colleges and universities would receive $1 million in operating aid in FY 2019, the same as in FY 2018.
|Institution||Final FY 2018 Appropriation||Final FY 2019 Appropriation||Difference|
|State Colleges and Universities|
|The College of New Jersey||859||859||0|
|New Jersey City University||1,129||1,129||0|
|Thomas Edison State University||228||323||95|
|William Paterson University||1,111||1,111||0|
|Public Research Universities|
|Rutgers University - New Brunswick||8,013||8,013||0|
|Rutgers University - Newark||1,086||1,086||0|
|Rutgers University - Camden||559||559||0|
|Agricultural Experiment Station||404||404||0|
|New Jersey Institute of Technology||1,187||1,187||0|
|Montclair State University||1,316||1,316||0|
|* compared to the governor's proposed budget, this represents a restoration of 305 state-funded positions|
** compared to the governor's proposed budget, this represents a restoration of 205 state-funded positions, including Rowan Cooper
|Financial Aid Programs|
|Program||Final FY 2018 Appropriation||Final FY 2019 Appropriation||Difference|
|EOF - Opportunity Program Grants||$29,054,000||$30,554,000||$1,500,000|
|EOF - Supplementary Education Program Grants||$14,768,000||$14,768,000||$0|
|EOF - Total||$43,822,000||$45,322,000||$1,500,000|
|Tuition Aid Grants (TAG)||$425,859,000||$432,859,000||$7,000,000|
Also Noteworthy:Center on Gun Violence Research
The governor has proposed $2 million to establish a Center on Gun Violence Research. He described the center in his budget address:
This budget also provides $2 million to establish a new Gun Violence Research Center to be based at one of our state universities. Congress has refused to fund such necessary research for over two decades. It is now up to the states to lead. This investment will start this long-overdue process. When we [the states of NJ, NY, CT, and RI] formed States for Gun Safety, I recognized the critical need for the data-driven research we need to enact better public policy. Working together with our partner states, we're taking that approach.
Federal Funds for Statewide Higher Education Planning
The budget includes $3.5 million in new federal funds for "statewide planning and coordination for higher education." Language in the proposed budget would allocate $500,000 of those funds to support the maintenance of the statewide longitudinal New Jersey Education to Earnings Data System.
July 5, 2018
A cash infusion for NJ Transit, more money for public school and some property tax relief, that’s what is in the new $37.4 billion budget signed by Gov. Phil Murphy. It’s raising $1.5 billion in new revenue to pay for it in new taxes that won’t impact most New Jerseyans, according to NJ Spotlight reporter John Reitmeyer.
Elements specifically aimed at public higher education include the following increases over last year’s budget:
• $1.5 million – the Educational Opportunity Fund (EOF);
• $25 million – Community College Opportunity Grant ($20 million for scholarships; $5 million for planning grant);
• $7 million – the Tuition Aid Grant program; and
• 95 new state-funded positions for Thomas Edison State University.
Increases over what the Governor proposed in his March budget include:
• $1 million Thomas Edison State University – National Guard Tuition Waiver Reimbursement;
• $800,000 New Jersey City University – College Bound/GEAR UP Program;
• $2 million Rowan University – Center for Research and Education in Advanced Transportation Engineering Systems;
• $500,000 Rowan University/Cooper/Coriell Institute – Camden Opioid Research Initiative; and
• 305 state-funded positions for Stockton; 205 state-funded positions for Rowan (including Rowan Cooper).
These increases basically restored the operational appropriations for NJASCU members to the FY 2018 level; the NJCU GEAR UP Program appropriation represents an increase over FY 2018.
“The final version specifically targets wealthy people and wealthy corporations with the big tax increases,” Mr. Reitmeyer said.
A new 10.75 percent tax on the 1,760 people in New Jersey earning more than $5 million, or penta-millionaires, would raise $280 million. Boosting the corporate business tax, or CBT, on businesses making more than $1 million up to 11.5 percent for two years, then 10.5 percent for two years, would raise $425 million.
“That’s really trying to be surgical, to not put any pain on the average New Jersey resident, direct pain on the average New Jersey resident, and keep it on those who maybe have the means to absorb some of these new costs the most,” Mr. Reitmeyer said.
The budget also closes corporate loopholes. One fix called combined reporting would raise $200 million by preventing companies from moving profits out of state to avoid taxes. Repatriation would generate another $200 million by taxing profits parked in offshore shelters. The state also hopes to make $188 million by taxing online retailers from out of state. Businesses call these measures devastating.
“There are so many challenges to this budget and the tax increases across the board. The CBT surcharge, the increase on millionaire’s tax over $5 million, which is a tax on small business, the repatriation language and combined reporting – all these things alone would be concerning. You pile them all together, and we’re very concerned,” said New Jersey Business and Industry Association President and CEO Michele Siekerka.
“They’re doing just fine. They have figured out how to game the system through tax incentives, tax breaks, an army of tax lawyers to make sure their effective tax rate is lower. It’s time to even the playing field for all businesses that operate in New Jersey,” said Sheila Reynertson, a senior policy analyst at New Jersey Policy Perspective.
A 90-day tax amnesty program could raise $200 million, a one-shot deal. The state will also collect 50-cent per ride surcharges on Uber and Lyft, impose the sales tax on home shares like Airbnb and tax the liquid nicotine in e-cigarettes.
“Those are sort of modernization taxes, where you’re kind of bringing the tax code up to date with different services that have become popular since the tax code was originally written,” said Mr. Reitmeyer.
“Quite frankly, costs are going up in New Jersey and we need that kind of revenue to keep the lights on in New Jersey,” Ms. Reynertson said.
What do New Jersey residents get in return for that new revenue? The budget keeps some of the governor’s promises: it pumps $3.2 billion into the pension system and gives NJ Transit $242 million, the amount originally requested in Governor Murphy’s initial budget proposal. The transit system’s been underfunded for the past eight years.
Public schools will get more money, an extra $402 million, and a new formula championed by Senate President Steve Sweeney will attempt to distribute the money more equitably. No one district will see its aid change more than $3.5 million the first year. The budget lets homeowners deduct $15,000 in local taxes from their state tax bill, and also restores $150 million that had been cut from the Homestead Rebate, a popular property tax relief program.
“So, for someone who has a bill over $10,000 that gives them a little bit of a break. Does it make property taxes fixed? No, but it helps cushion the blow,” said Mr. Reitmeyer. “If you’re living on a fixed income, a couple hundred dollars off your property tax bill is pretty meaningful.”
Another plus for families is that the budget creates a new tax credit for child care and dependents and will gradually raise the Earned Income Tax Credit to 40 percent of federal levels. One major benefit comes from what the budget doesn’t do. It doesn’t restore the sales tax back to seven percent.
All sides agree, New Jersey could benefit by crafting careful budgets on a three-year fiscal cycle instead of these one-year budgets with one-shot revenues. But New Jersey’s budget is based on the political calendar with all the pitfalls that entails.