New Jersey local governments authorized to increase taxes by Murphy

New Jersey Governor Phil Murphy recently signed a set of bills that grant cities and towns the authority to contemplate overriding a local property tax cap. The aim of this move is to counterbalance the potential funding reductions for certain school districts.

School districts would be granted the authority to surpass the state’s 2% cap on property tax levy hikes by utilizing any unused portions from previous budget cycles, according to the proposed legislation led by the Democrats.

The state Department of Education would establish a Stabilized School Budget Aid Grant Program to offer grants equivalent to 45% of a school district’s reduction in state school aid for the 2024-2025 academic year. To support this program, $44.7 million has been allocated.

According to Murphy, the legislation offers crucial assistance to local governments during challenging times. He emphasizes that the already complicated task of adopting a balanced budget is further complicated by the difficult financial realities.

In a statement, Governor Murphy expressed his satisfaction in offering support to school districts that are experiencing cuts in funding. Moving forward, he looks forward to collaborating with Education Commissioner Kevin Dehmer to ensure that our tax dollars are utilized responsibly in order to uplift all students.

According to Assembly Speaker Craig Coughlin, a Democrat, the proposed legislation aims to offer greater flexibility to local districts in their future planning endeavors, all while ensuring their continued dedication to fully funding education.

Coughlin stated that the support provided will also help to immediately mitigate job losses and cuts to programs resulting from fluctuations in the funding formula.

In February, Murphy introduced his budget plan worth $55.9 billion. He is suggesting the complete funding of the state’s public school funding formula, marking it as a historic first for the state.

According to the Murphy administration, nearly 140 school districts, out of over 580 districts statewide, would experience a decrease in their education funding next year. However, the plan still remains in place.

Murphy’s initial budget proposal includes a plan to boost school funding by $908 million, bringing the total to $11.7 billion in the upcoming fiscal year.

The Democratic-controlled Legislature rejected a proposal put forth by Republicans to amend the Appropriations Act. The proposal aimed to fully restore approximately $200 million in school funding cuts for specific school districts in FY 2025. Furthermore, it sought to allow districts that received supplemental “hold harmless” aid in the previous year to offset budget cuts and receive the same amount in the upcoming fiscal year. Unfortunately, the Democratic-controlled Legislature did not support the GOP’s proposal.

Republicans claim that the Murphy administration has been slow to implement education funding reforms while spending excessive amounts of money on unnecessary projects. They argue that this has resulted in increased pressure on local governments to raise property taxes in order to make up for funding gaps.

School officials have advocated for more flexibility to circumvent spending restrictions, despite acknowledging that the 2% cap has been credited with slowing the growth of New Jersey’s “highest-in-the-nation” property taxes.

School leaders expressed their gratitude for the approval of the relief bills package, while also emphasizing the need for further reforms in the state’s funding formula. Their aim is to guarantee that school districts receive adequate funding to meet their educational requirements.

Timothy Purnell, the executive director of the New Jersey School Boards Association, acknowledged the relief that has been provided but emphasized the need for continued efforts in addressing school funding. In a statement, he highlighted the importance of remaining focused on the matter and expressed optimism in collaborating with the Murphy administration and the Legislature. Purnell emphasized the necessity of evaluating the school funding formula and making any required adjustments to ensure that every student in New Jersey receives a comprehensive and effective education.

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MBS Staff
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