On the eve of Gov. Phil Murphy’s final budget address, there’s a general sense that this spending plan might be the governor’s most challenging.
Murphy has already asked his department heads to trim their spending plans. Add to that, talk of cuts to Medicaid on the federal level, the end of COVID-19-related relief funds, a structural deficit, even a federal shutdown.
“This is a worrying budget,” said Peter Chen, a senior policy analyst at the New Jersey Policy Perspective think tank.
“This budget, you can go into your surplus. But it’s not a rainy day and we’re already raiding the rainy day fund,” Chen said. “As we see at the federal level, there are threats coming. Even a small cut in Medicaid could mean billions lost in funding to the state and we can’t afford that. If we’re spending down our surplus instead of saving up more, we’re not going to have enough to cover the gaps that are left from chaos in Washington.”
