2022 NJ State Budget

The following is the Governor's office Budget at a Glance summary of the 2022 budget. The theme is "Building a Stronger, Fairer Post-Pandemic New Jersey." 

For Fiscal Year 2022 (FY2022), the Governor proposes a budget that will allow New Jersey to emerge from the pandemic healthier and more resilient while making sure our state remains a leader for generations to come. 

Confronting the State’s Challenges 

Due to its proximity to New York City and a population density that leads the nation, New Jersey became an epicenter for the pandemic last year. Over 22,000 lives have been lost to the virus, and hundreds of thousands fewer New Jerseyans are employed now than they were last winter. This virus has been a blow to the entire state, but has hit some communities harder than others. Communities of color, in particular, struggled prior to the pandemic and have suffered exceptionally from the health and economic impacts of the virus. This budget speaks directly to the needs of these communities in recovering. The coronavirus has also exposed many of our government’s long-standing problems, including decades of fiscal gimmickry and neglect of state capacity. The Murphy Administration is committed to addressing these challenges and will continue to achieve real change. 

Recovering from the Coronavirus 

  • Delivering for Residents: New Jersey has set and met ambitious goals for daily testing and contact tracing. The State has built a vast network of nearly 300 vaccination sites tasked with reaching the highest risk individuals and frontline essential workers. It has delivered over 1.5 million doses through mega sites, county and local sites, pharmacies, and community health centers. To advance our state’s recovery, the budget makes new investments into nursing facilities, the Department of Health’s staffing and IT capacity, and our Motor Vehicle Commission and Unemployment Insurance system. 
  • Distributing Emergency Relief: Since last March, the State has expended over $2 billion in federal funds to maintain operations and support tens of thousands of small businesses, renters, and child care providers. The State looks forward to working with the new federal administration to make sure that New Jersey has the necessary resources to respond to the pandemic and ensure security for our educators, police officers, firefighters, paramedics, and others who have faced the pandemic head-on.
  • Targeting Vulnerable Communities: The Murphy Administration has strived to ensure that all residents are assisted through its coronavirus response. These efforts include the recent launch of a community-based vaccination partnership in some of our most diverse and socio-economically challenged communities, a $60 million mission to close the digital divide that has helped over 230,000 disadvantaged students access needed technology, and an economic relief strategy that provided critical lifelines to minority and women-owned businesses. 

Restoring New Jersey’s Capacity 

  • Making the Full Pension Payment: The proposed FY2022 budget includes an additional $1.6 billion for the State’s pension system or 100 percent of the Actuarially Determined Contribution. This is the first time the State has made its full contribution since FY1996. Making the pension payment means keeping the government’s word to the hundreds of thousands of our retirees who depend on their pension, and it shows that the Administration is dealing with its fiscal issues honestly and transparently. 
  • Modernizing Government: The Administration continues to seek savings across government and employee health benefits to maintain high-quality at the lowest possible cost. The FY2022 budget expands on permit modernization efforts across departments to make government more accessible. It also increases capital spending by $67 million to keep more of the State’s buildings and institutions in a state of good repair. 

Advancing our Affordability Agenda 

Governor Murphy is committed to making New Jersey a more affordable place to live for all its residents. Over the past three years, the Governor has made New Jersey a vastly better place for countless middle-class and working families. New Jersey is now on its third year of a $15 per hour minimum wage phase-in, and property taxes have seen the lowest cumulative increase for any governor at this point in his term on record. 

The FY2022 budget includes significant middle-class tax relief, as well as new investments in health care, child care, higher education, and housing. 

Lowering Costs for Seniors and the Middle Class 

  • Distributing Middle Class Tax Relief: In FY2022, over 760,000 New Jersey families will receive an up to $500 tax rebate due to the millionaires tax enacted by the Governor and the Legislature last fall. This budget also supports the expanded Veterans’ Property Tax Deductions approved through last year’s ballot measure. 
  • Cutting Taxes for Working Families and Seniors: Governor Murphy pushed for the creation of the Child and Dependent Care Credit (CDCC) in 2018. This budget makes the CDCC refundable and expands eligibility to families making up to $150,000. These changes will more than double the number of eligible families and significantly increase the size of the credit for the lowest-income recipients. After expanding the Earned Income Tax Credit (EITC) from 35 to 40 percent of the federal credit, the Governor proposes making senior citizens without dependents eligible for the EITC this year. 
  • Ensuring Access to Health Care: By creating a State-Based Exchange and creating the NJ Health Plan Savings subsidies, New Jersey has made health care more accessible and affordable for hundreds of thousands of residents. This budget invests an additional $25 million into these subsidies. This budget additionally provides new supports for both children and seniors. It launches the Cover All Kids initiative, which will eventually cover the 88,000 children without health insurance in New Jersey. It also raises the income threshold by $10,000 for the Pharmaceutical Assistance to the Aged and Disabled (PAAD) and Senior Gold programs, which will benefit over 20,000 seniors. 

Making College and Housing More Affordable 

  • Expanding Higher Education: This budget re-proposes the Garden State Guarantee, which will increase our outcomes-based funding formula allocation by nearly $50 million so that four-year public colleges and universities can complement our community colleges in providing two years of free tuition to students with annual household incomes of less than $65,000. The budget also supports increased enrollment for Community College Opportunity Grants (CCOGs) and the Educational Opportunity Fund (EOF), so that more students can benefit from these successful programs. 
  • Constructing Housing Opportunities: The budget ensures that the Affordable Housing Trust Fund continues to help renters and homeowners, through current programs like the Small Projects Grant and new pilots to advance workforce rental housing and risk-sharing arrangements. The budget will also invest $20 million into the Housing and Mortgage Finance Authority’s Down Payment Assistance (DPA) program, which will help the Authority provide nearly 2,000 mortgages for first-time homebuyers. 

Investing in Our Future 

The Governor’s budget proposes major new investments into pre-K through 12 education, infrastructure, and economic development. Some of these investments build on prior-year initiatives that have shown clear results for New Jerseyans. Due to our public education investments, the largest number of school districts have kept school levies below two percent since 2014. Due to our NJ TRANSIT investments, for the fourth straight year, commuters will see no fare hike. The Governor also proposes new investments to ensure an equitable recovery. As the State rebuilds post-pandemic, these investments will be critical to keeping New Jersey the best state to raise a family. 

Leading on Public Education and Workforce Training 

  • Bolstering Pre-K through 12 Education: This year, the Murphy Administration proposes spending $624 million more on direct pre-K through 12 education aid than it did in FY2021, including investing $25 million more into Extraordinary Special Education Aid and creating a $50 million Stabilization Aid program. The Administration has increased direct pre-K through 12 spending by nearly $1.5 billion since 2018. The Department of Education has approved over 6,500 preschool seats in over 100 new districts, with 1,800 more seats in 25 new districts expected in FY2022.
  • Strengthening our Workforce: The proposed budget will continue to use the Workforce Development Partnership Fund to support programs like the New Jersey Apprenticeship Network. It will also help fund the new Career Impact Bond program in partnership with the New Jersey CEO Council, and provide seed funding to implement Future of Work Task Force initiatives like Lifelong Learning Accounts and worker training stipends. The new Office of Climate Action and the Green Economy will also lead on addressing climate change, ensuring New Jersey’s clean energy future, and transitioning to a green economy while prioritizing equity and environmental justice. 

Supercharging our Economic Recovery 

  • Reviving Small Businesses: This budget includes $100 million over two years for the Main Street Recovery Finance Program, which was created by the historic incentives legislation enacted in January. It also includes a nearly $100 million economic development package that boosts grant programs in multiple departments and launches the EDA’s Black and Latinx Seed Fund to increase access to capital in underserved minority communities. 
  • Highlighting our State’s Assets: The budget includes an additional $20 million for the Department of State’s Arts and Culture programs and an additional $20 million for beach replenishment, so that New Jersey continues to be a compelling state to live in and visit. 
  • Rebuilding our Infrastructure: This budget makes significant investments in multiple types of infrastructure, including a $200 million direct appropriation for the Offshore Wind Port and a $200 million appropriation to replace borrowing for current Schools Development Authority (SDA) projects. The Governor is also creating a new Capital Maintenance and Emergent Needs Grants program at the SDA and continuing the Drinking Water and Clean Water Infrastructure Fund created last year. 

Embracing New Jersey Values 

Governor Murphy has consistently said that we cannot have a stronger New Jersey without a fairer New Jersey. This budget doubles down on our commitments to our children, vulnerable populations, women’s health, and criminal justice reform. The pandemic’s unequal impacts on our society have made these financial supports more important than ever. 

Protecting our Most Vulnerable 

  • Supporting Youth Mental Health: The Governor proposes annualizing last year’s rate increase to the Children’s System of Care, so that the State pays $108 million more than it did in FY2020. These funds are rebalancing out of home and in-community service rates for the first time in 15 years so that the State can better serve children with emotional and behavioral health care needs and maintain its portfolio of providers. 
  • Providing Critical Services: The budget includes $86.1 million in increased provider payments to account for 2021 and 2022’s phase-ins toward a $15 minimum wage. In FY2021, the Governor dedicated $94 million toward residential providers for individuals with intellectual and developmental disabilities so they could respond to increased pressures due to the coronavirus. In the first half of FY2022, the Governor will dedicate an additional $57 million toward this effort. 

Expanding Opportunities 

  • Defending Women’s Health: This budget supports the new Reproductive Health Care Fund, which will cover costs for contraceptive, prenatal, labor, and delivery care for those currently unable to receive medical assistance. It also advances the First Lady’s Nurture NJ initiative, both by expanding Medicaid coverage for 365 days post-partum and by creating a new pilot program to provide rental assistance for expecting mothers. Since 2018, the Governor will have provided almost $74 million toward Family Planning Services, after these programs were defunded in the prior administration. 
  • Transforming Criminal Justice: The Governor’s budget continues New Jersey’s leadership on ending mass incarceration and providing second chances to those with criminal records. This budget proposes new investments into our youth services commissions, correctional facilities, youth and adult workforce training programs, and re-entry programs. It also provides funding to end the prohibition on income assistance for those with drug convictions.