Promises for South Jersey, a $3B deficit, property tax relief tensions: What to know ahead of Mikie Sherrill’s first budget address
New Jersey Gov. Mikie Sherrill will grapple with contentious spending cuts as she promises not to raise taxes ahead of her budget address on Tuesday.
New Jersey Gov. Mikie Sherrill has promised not to raise taxes on New Jerseyans. But she’s also warned that the state is in a dire financial position.
Her first budget address on Tuesday will lay out how she believes she can keep her word on taxes while stabilizing the state’s finances — and reveal what fights are on the horizon as the new Democratic governor faces a test in negotiating with members of her own party, who dominate Trenton.
Sherrill has been tight-lipped about where she wants to make trims, but she’s made it clear she plans to rein in state spending as her administration forecasts a $3 billion deficit if the state continues on its current financial trajectory. She said last month she instructed all departments to identify potential savings.
“I refuse to put off for tomorrow what we have to fix today,” she said last month. “Washington isn’t coming to save us … We have to stand on our own two feet and make some tough choices.”
She is slated to deliver her budget address in front of the state legislature on Tuesday afternoon before the Democratic-led Assembly and Senate embark on months of hearings and negotiations ahead of a June 30 deadline.
What will Mikie Sherrill’s budget proposal do for South Jersey?
Sherrill, of Montclair, has assured South Jersey voters she won’t neglect the less populated section of the state, where residents sometimes feel overshadowed by northern parts of the state outside of New York. In her inauguration address, she jokingly referred to Philadelphia as being “in the greater Camden metropolitan region.”
In an interview on the campaign trail in Evesham last year, Sherrill said that South Jersey residents “are going to be a priority in Trenton, and that’s something I’m committed to.”
She said at the time that South Jersey in particular needs more transportation and economic growth.
“I’ve committed to really engaging on these issues and building a statewide plan, not a North Jersey Plan,” she added.
Her transition team proposed several projects for South Jersey last month that align with those priorities, including a rail line connecting Glassboro and Camden, a port expansion for Camden, Paulsboro, and Salem, a rapid bus network, and investments in Atlantic City.
Sherrill visited Camden the day before her inauguration and said she would direct resources to the city to commemorate the Rev. Dr. Martin Luther King Jr. She has recently made more stops to the region, including in Deptford.
A property tax relief program for seniors could be a point of contention
A recently implemented property tax relief program meant to incentivize seniors to stay in New Jersey instead of retiring in sunny and low-tax Florida could become a point of contention.
New Jersey Treasurer Aaron Binder, who was appointed by Sherrill, said he would not rule out cuts to the “Stay N.J.” program. The bipartisan tax break was championed by Assembly Speaker Craig Coughlin, a Central Jersey Democrat, and it’s unlikely it would be touched without a fight.
Critics of the program believe the eligibility should be lowered, since seniors who make below $500,000 a year are eligible and it’s a big expense for the state.
“That would be subject to an intense negotiation, I would think,” said Sen. John Burzichelli, a Gloucester County Democrat who serves on the Budget and Appropriations Committee. “Impossible? No, but it would not be something that would happen lightly.”
Sherrill’s quest for cuts could lead to tensions within her party
Sen. Michael Testa, a South Jersey Republican and member of the Budget and Appropriations Committee, said he is “cautiously optimistic” that Sherrill will cut down spending because her administration reached out to him and other Republican legislators for feedback.
“At least Gov. Sherrill is acknowledging that there is a structural deficit … so we’ve made progress,” he said in a jab at former Gov. Phil Murphy, another Democrat.
Testa hopes Sherrill’s administration cuts “pork barrel spending” which refer to line items in the budget that are often secured by legislators for their districts through an opaque process.
However, Sherrill could face tension with her fellow Democrats if she cuts projects that are important for their districts. And lawmakers may be even more concerned about delivering money for their districts as primaries have gotten more competitive in the state since the fall of the county line system.
“I anticipate we’ll see a lot of legislative initiatives not included in her budget, causing us to have to go back and reevaluate,” Burzichelli said.
Another area for funding adjustments is the state’s school funding formula, which impacts property taxes.
Sherrill indicated that she wants to make changes to the school funding formula during her campaign, and told reporters in Trenton the day after she was elected that she wants to “stabilize and modernize” the policy.
Republicans like Testa have been outspoken against the formula, but Burzichelli said it “works in most cases” and was determined to be constitutionally sound by the New Jersey Supreme Court. The legislature has tweaked it in recent years.
“There are hours of meetings coming,” Burzichelli said. “There are public meetings, there are committee meetings, there are hours and hours of meetings.”