With state finances in turmoil, Gov. Phil Murphy’s administration announced earlier this week it had ordered $920 million in discretionary spending be put on hold.
New Jersey homeowners will feel the pinch, as the impounded cache includes $142 million in Homestead property tax relief that would have reduced the May tax bills for hundreds of thousands of taxpayers.
Nearly $24 million in aid for distressed municipalities, some of New Jersey’s most financially vulnerable towns, was placed on reserve, as was $10 million in new aid to help Trenton lower property taxes.
The state’s colleges will have to wait and see on some $70.6 million in support, including nearly $30 million to the Rutgers system, $7.1 million to Montclair State University, $4.1 million to Kean College and $7.2 million to the Rowan system.
The state treasurer said in a letter to department heads that the spending freeze was necessary “in light of the fiscal uncertainly due to the COVID-19 health emergency ... to ensure sufficient cash and budget authority to meet emergency and statutorily required obligations.”
The state’s fiscal year ends June 30 and it can’t run a deficit.
Entire industries have temporarily closed their doors as New Jersey carries out dramatic social distancing to slow the spread of the coronavirus. This will undoubtedly reduce the consumption taxes the state collects on goods and services.
“The impact of COVID-19 on the State, its economy, and budget and finances is unpredictable and rapidly changing, but the State believes that events surrounding COVID-19 will negatively impact the State’s economy and financial condition," the treasurer said in a recent financial disclosure.
You can review the full list of frozen appropriations here.