July-8-2019

MURPHY’S BUDGET FREEZE HITS AID FOR NEEDY TOWNS

Below is an article written by Brenda Flanagan and published by NJ Spotlight on July 8, 2019.

Decision creates difficulties for municipalities like Paterson, Atlantic City and Camden

Paterson Mayor Andre Sayegh says his city relies heavily on state transitional aid, receiving $33 million last year. This year they hoped for $26 million, but Gov. Phil Murphy has frozen most of the transitional aid to municipalities in the new state budget. It’s the biggest chunk of $235 million in spending items that the governor has locked up in reserve. It was part of a list the Treasury unveiled Wednesday, along with 64 other items that include aid for colleges, hospitals, parks and prisons.

“The overwhelming amount of the up to $235 [million] are programs we like,” Murphy said.

When he signed the $38.7 billion state budget, Murphy indicated he couldn’t justify authorizing those expenditures because he believed the Legislature overestimated its revenue projections by $200 million and lawmakers had refused to raise more revenue by passing his millionaires tax.

“I want to build a basketball hoop in every driveway in the state, but in the end of the day the buck stops with me. I’ve got to certify these revenues. I’ve got to make sure that we are within our means,” Murphy said.

Christie did it in 2016

The $104.8 million in transitional aid tops Murphy’s list of $235 million in frozen spending items. It includes millions of dollars for colleges like Montclair State University, Stockton University, and Cooper Medical School; grants for a South Jersey cancer program; money for Essex County Jail programs; traffic studies, arts and agriculture. Locking up spending items pending required revenue isn’t a new budget trick — Gov. Chris Christie did it in 2016. Some $27 million in frozen programs are tied to Murphy’s nemesis, and longtime friend of Senate President Steve Sweeney, South Jersey powerbroker George Norcross.

“There’s certainly political undercurrents here, though I think the driving force would just be the financial realities and the governor having this concern about some of the savings and revenue items that were in the legislative budget. At the end of the day, it’s the governor who has that constitutional authority to certify revenues,” said NJ Spotlight’s John Reitmeyer. “And Murphy is tying these reserve items to maintaining the surplus.”

Sweeney rails against it

Sweeney, who stands by the Legislature’s revenue estimates, said in a scathing statement Wednesday, “The Governor’s action putting a so-called freeze on items cherry picked from the budget is a shameless act of political retribution that is both petty and vindictive — it’s Bridgegate on steroids that punishes those who disagree. This is an abuse of gubernatorial power that victimizes some of the neediest and most vulnerable people in New Jersey […]”

The spending freeze is certainly problematic for mayors in cities like Atlantic City, Camden and Paterson who depend on transitional aid to balance their budgets.

“Yeah, there’s the potential for layoffs,” Sayegh said. “I mean, you’re looking at police, fire, public works, potentially. So we’re going to fight to avert that at all costs.”

“First of all, why are they even on this list? They’ve already been determined to be, literally, the most needy municipalities in the state. They need this money to make their cash flow. The state has determined that,” said Michael Darcy, executive director of the League of Municipalities.

The question now: Assuming revenues do increase, when and how might they be released?

“We normally don’t receive our award until later in the year. And we will have time to lobby, and we will have advocates,” Sayegh said.

How long will the freeze last? The governor has indicated he wants proof the revenues are there before he authorizes any spending.

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