PDF State of New Jersey

State of New Jersey

The Governor's FY 2018 Budget

Budget Summary

Chris Christie, Governor

Kim Guadagno, Lt. Governor

Ford M. Scudder State Treasurer

David A. Ridolfino Acting Director

Mary E. Byrne Deputy Director

Jacki L. Stevens Associate Director

Lynn M. Azarchi Assistant Director

Brian E. Francz Assistant Director

Office of Management and Budget February 28, 2017

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TABLE OF CONTENTS

STATE OF NEW JERSEY FY 2018 BUDGET SUMMARY

CRISIS, RECOVERY AND A FOUNDATION FOR FUTURE PROSPERITY ................................................ 2 Fostering Economic Growth .................................................................................................................... 2 Making Critical Investments .................................................................................................................... 5

THE FISCAL YEAR 2018 BUDGET ............................................................................................................ 10 The State Budget at a Glance ............................................................................................................... 10 Employee Benefits.......................................................................................................................... 13 Public Employee Health Care Reforms .......................................................................................... 14 Pre-K - 12 Education ...................................................................................................................... 16 Higher Education ............................................................................................................................ 17 Health and Human Services ........................................................................................................... 18 Property Tax Relief ......................................................................................................................... 24 Local Government .......................................................................................................................... 26 Public Safety and Criminal Justice ................................................................................................. 27 Bail Reform..................................................................................................................................... 27 Transportation ................................................................................................................................ 27 Lead Safety .................................................................................................................................... 28

NEW JERSEY ECONOMIC OUTLOOK ...................................................................................................... 29 Fiscal 2018 Revenues........................................................................................................................... 32 Gross Income Tax .......................................................................................................................... 33 Sales Tax........................................................................................................................................ 34 Corporation Business Tax .............................................................................................................. 35

APPENDIX ...........................................................................................................................37

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SECTION I

CRISIS, RECOVERY AND A FOUNDATION FOR FUTURE PROSPERITY

CRISIS, RECOVERY AND A FOUNDATION FOR FUTURE PROSPERITY

This is the eighth and final budget of Governor Christie's two terms as Governor. When the Governor proposed his first budget in 2010, New Jersey was in the middle of an undeniable, unprecedented fiscal crisis.

Upon entering office in January 2010, Governor Christie faced an immediate $2.2 billion mid-year fiscal deficit for fiscal 2010, as well as a $10.7 billion projected budget gap for fiscal 2011, more than a third of the prior year's budget.

The budget that Governor Christie inherited in fiscal 2010, with a $13 billion two-year gap, represented the culmination of years of shortsighted policies and poor budgeting practices that ignored economic realities. As both the state and national economies faltered, spending in Trenton continued unabated at unsustainable levels - increasing 58% from 2001 to 2008.

The fiscal 2010 budget was propped up with temporary income tax hikes, corporate surtaxes, reckless reliance on one-time federal stimulus funds, temporary employee furloughs and other desperate gimmicks.

It was not easy, but the Governor laid out a decisive plan to do what was necessary to stabilize the State's finances without raising taxes or incurring massive new debt. Deep but necessary cuts were made to every department of State government, while still honoring the Governor's commitment to provide for the most vulnerable New Jerseyans. The Christie Administration cut spending, cut red tape, and unleashed the State's small businesses with targeted tax cuts.

Building on a foundation of fiscal restraint and responsibility, and overcoming years of fiscal irresponsibility, in addition to unforeseen challenges, such as those posed by Super Storm Sandy, the Governor has delivered strong and steady economic progress and job growth throughout his two terms, while funding $2 billion less in discretionary spending in fiscal 2018 than in fiscal 2008.

Fostering Economic Growth

Jobs and the Economy

Since Governor Christie took office, New Jersey has created an impressive 282,000 private-sector jobs. That is seven consecutive years of positive private-sector job growth. New Jersey has not only recovered all of the private-sector jobs lost in the Great Recession, it has created an additional 33,000 jobs. This strong performance in the job market has had a dramatic impact on the unemployment rate, which has dropped to only 4.7%, the lowest it has been since March 2008. This unemployment rate is less than half of the recessionary peak of 9.58% in January 2010. The number of New Jersey residents filing a continuing claim for unemployment insurance at the end of 2016 was nearly 40% lower than the number from February 2010.

New Jersey's unemployment rate is below that of the nation as a whole, while the percentage of our hardworking population participating in the labor force exceeds the average of the United States, at 63.4% compared to 62.7%. This increase in employment has led New Jersey's total personal income to rise by a very healthy 25% since the first quarter of 2010, a growth rate of 3.5% annually.

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