New Jersey Governor Signs Fiscal Year 2023 Budget
Angela Lawrence, Paraprofessional at Klatzkin, contributed to this post.
On June 30, 2022, after passage by the State Senate, New Jersey Governor Phil Murphy signed the Fiscal Year 2023 Appropriations Act, also known as the State’s budget for the coming fiscal year. At $50.6 billion, it is the largest budget in the State’s history and includes a record $6.8 billion surplus. Some highlights of the new budget include:
- Property Tax Relief: Replacing the Homestead Benefit program is the Affordable New Jersey Communities for Homeowners and Renters Property Tax Relief Program (ANCHOR), which will provide relief to double the number of homeowners and also include renters, which the previous program did not. Homeowners with a household income under $150,000 will receive a $1,500 property tax benefit each year. Homeowners with a household income between $150,000 and $250,000 will receive a yearly $1,000 property tax benefit. Renters with incomes up to $150,000 will receive $450 each year.
- NJ Transit: Funds have been allocated for capital improvements and maintenance, including projects at Walter Ran Transportation Center in Camden, Newark Penn Station, and Hoboken Terminal. The budget also provides an additional $40 million to invest in fare modernization, disaster recovery software, and procurement technology.
- Education: Approximately $1.9 billion has been allocated to the Schools Development Authority (SDA), which is out of money and needs funds to address overcrowding and outdated schools. Most of the funds will be applied to facilities projects and maintenance at SDA schools, while a small portion will pay for projects in non-SDA districts. Additional funds will go towards advancing preschool education in the State and improving higher education access and affordability.
- Tax and Fee Holidays: The budget contains a provision for a year of “fee holidays” for driver’s license renewals, marriage licenses, certain health care professional license applications or renewals, and visits to state parks. It also includes a back-to-school sales tax holiday, which will take place from August 27 to September 5, 2022. Tax-exempt items will include school supplies (such as pens, pencils, notebooks, and binders); school art supplies (paints, paintbrushes, clay, etc.); school instructional materials (such as reference books, maps, globes, textbooks, and workbooks); computers; and school computer supplies such as printers.
- Child Tax Credit: This new credit builds upon the federal Child Tax Credit for qualifying families. It provides a maximum of $500 per child under the age of 6 for taxpayers making $30,000 or less and phases out at an income of $80,000 per year.
- A $6.82 billion pension payment, the State’s contribution to the pension plan for public employees.
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©2022 Klatzkin & Company LLP. The above represents our best understanding and interpretation of the material covered as of this post’s date and should not be construed as accounting, tax, or financial advice. Please consult your tax advisor concerning your specific situation.