The Town Crier - Legislative Backgrounder

The Town Crier - Legislative Backgrounder

Sep 24

[ARCHIVED] State FY’21 Nine-Month Budget Goes To Governor

The original item was published from September 24, 2020 9:34 AM to October 15, 2020 10:53 AM

On August 26, in Piscataway, Governor Murphy presented his budget proposal for State Fiscal Year 2021 (SFY ’21) to the Legislature and people of New Jersey. That proposal set the stage for a budget that would govern State spending from October 1, 2020, through June 30, 2021.

As the Senate Budget and Appropriations Committee and the Assembly Budget Committee began to consider the proposal, League President Jim Perry and Executive Director Mike Cerra reached out to the Governor and the Legislature, expressing our support for crucial components of the budget, and our serious concerns with others.

During the week of September 21, the Legislature’s FY ’21 Appropriations Act was introduced as S-2021/A-4270, released from committees, and approved by both Houses. It now awaits the Governor’s signature. If enacted as is, it will protect vital municipal property tax relief funding, across the board.

The Governor asked the Legislature to hold combined appropriations for Energy Tax Receipts Property Tax Relief (ETR) and Consolidated Municipal Property Tax Relief Aid (CMPTRA) level for the balance of the year. While level funding is not full funding, Governor Murphy continues to propose budgets without further deep cuts to these vital, unrestricted, statewide municipal property tax relief programs. The Legislature, as we asked, concurred with the Administration on this.

The Governor’s proposal also called for level funding in Transitional Aid, Capital City Aid, Open Space Payments in Lieu of Taxes, and Highlands Protection Fund Aid. We supported all of these appropriations, and the Legislature did, as well.

However, we expressed opposition to some budget cuts, as well as some proposed diversions that were in the Governor’s proposal. The Legislature heard us, carefully considered our arguments, and responded positively.

We thank the Leadership and Members of the budget writing committees in both Houses for addressing the League of Municipalities’ concerns with the Governor’s proposed FY 2021 Budget. Specifically:

  • Without the changes included in S-2021/A-4270, over $30 million Affordable Housing Trust Fund dollars would be used for other programs. These include $13.9 million for rental assistance, $4.4 million for homelessness prevention, $2.3 million for shelter assistance, and $10 million to offset general expenditures.

Last year, Governor Murphy and the Legislature ended the diversion of Affordable Housing Trust Fund monies. That budget included a total of $60 million. 50% was for the Municipal Settlement Fund to help municipalities develop small scale projects designed to meet their court-sanctioned affordable housing needs. 40% was for the Neighborhood Partnerships Fund to help Urban Aid municipalities with community development. The remaining 10% was for the Innovation Fund for projects that didn’t fit for funding under either of the other two programs.

Provisions in S-2021/A-4270 will prevent deep cuts in all of those affordable housing programs.

  • The proposed budget also included diversions of $12 million, from the State Recycling Trust Fund, and $10 million, from the Clean Communities Trust Fund, both to be used to offset State Parks management costs.

In the State’s last Fiscal Year, the Recycling Trust Fund provided $14.3 million in grants to municipalities to support their recycling efforts. Also last Fiscal Year, the Clean Communities Trust Fund provided $17.3 million in grants to support municipal anti-litter programs, beach clean-ups, stream clean-ups, and other local environmental activities. Provisions in S-2021/A-4270 will allow New Jersey municipalities to continue to support those crucial activities.

  • The proposed budget would have reduced funding for the Division of Local Government’s Shared Services and School Consolidation assistance grants program, from $10 million to $3 million. S-2021/A-4270 restores that program to the $10 million level.
  • Though we supported level funding, the Legislature added $10 million to the Transitional Aid program, allowing municipalities – large and small – experiencing fiscal distress to apply for a share of the over $124 million appropriated for the State’s upcoming Fiscal Year.

We appreciate all that State policy makers have already done, and continue to do, to limit the damage that Covid-19 inflicts on New Jersey families, our public health infrastructure, and private and public sector finances. We appreciate the difficult decisions that needed to be made, in order to balance this nine-month budget.

 Contact: Jon Moran, Senior Analyst,, 609-695-3481 x121.