(Photo by Edwin J. Torres/N.J. Governor’s Office)

The National Mediation Board has ended more than four years of negotiations between NJ Transit and a union representing its engineers without a resolution, paving the way for a strike that federal law could still delay by months.

NJ Transit locomotive engineers have been working under an expired contract since 2019 amid a collective bargaining standoff with the state over pay, but federal law that limits labor actions by railroads has kept them from striking despite a unanimous vote by the union’s members.

“It’s time for NJT to make a fair offer and settle this dispute voluntarily, otherwise our members will be walking picket lines rather than operating trains,” said Eddie Hall, president of the national branch of the Brotherhood of Locomotive Engineers and Trainmen.

Because rail service interruptions can significantly impact interstate commerce, railways — and commuter railways especially — must complete lengthy mediation processes before launching a job action.

The National Mediation Board is the largest of those hurdles. The body can indefinitely mediate disputes between rail unions and transit agencies, and it has kept the dispute between the union and NJ Transit in mediation for years.

The end of mediation kicks off a 30-day cool-off period, meaning locomotive engineers could strike as early as July 25, though they will likely have to wait months longer.

The union declined an offer of arbitration that followed the National Mediation Board’s release, which means the dispute will likely go to a Presidential Emergency Board.

Federal law requires President Joe Biden to convene a Presidential Emergency Board upon request from either of the parties or a governor in a state that would be affected by a job action. In this case, that list includes Govs. Phil Murphy, Kathy Hochul, and Josh Shapiro.

Statute requires the president to grant a requests emergency boards, which will create another 120-day lockout on job actions, though the board could end that lockout sooner.

The governors and parties can request a second Presidential Emergency Board be convened if the first does not reach a settlement within 120 days.

“While we are currently in the 30-day ‘cooling off’ period, in light of the BLET’s response to the National Mediation Board (NMB) rejecting binding arbitration to settle this matter, NJ TRANSIT fully intends, to make a formal request for a Presidential Emergency Board (PEB),” said Jim Smith, a spokesperson for NJ Transit.

the three governors did not immediately return requests for comment on whether they will ask Biden to convene a board.

“Our members are angry and feel betrayed,” Hall said. “Locomotive engineers kept the trains running during the pandemic. They have gone five years without a pay raise during a period of high inflation. These men and women want to serve the public with uninterrupted service, but they cannot continue working for subpar wages. They have had enough.”

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(Hal Brown for New Jersey Monitor)

After reaching a deal on a new state budget, lawmakers intend to advance the annual spending bill through budget committees on Wednesday with final votes set for Friday, though the timing is still in flux, a top Democrat said during a Monday budget hearing.

Legislators must approve and Gov. Phil Murphy must sign a budget by June 30 to avert a state government shutdown, and they rarely approve an annual spending bill without rubbing against the deadline.

“The timing is still up in the air,” said Sen. Paul Sarlo, the Senate’s budget chair.

Because New Jersey’s constitution requires bills to sit for a day between moving out of a committee and seeing a floor vote, budget committees must approve a budget no later than Friday and both full chambers must approve them by Sunday to avoid shutting down New Jersey’s state beaches, public parks, and government.

As part of the budget deal, legislators and the governor have agreed to enact a 2.5% surtax on corporations with more than $10 million in profit. The tax on roughly 600 businesses operating in New Jersey is expected to generate about $800 million annually and is forecast to bring in more than $1 billion in the fiscal year that begins July 1 (it will retroactively apply to the first six months of 2024).

Murphy proposed that the tax be dedicated to NJ Transit to cover a $766.8 million fiscal cliff the agency faces starting July 1, 2025. Sarlo on Monday said legislators would dedicate the funds in the budget year that begins next week.

“Every dollar will go to New Jersey Transit, dollar for dollar. No diversion whatsoever,” Sarlo told reporters following Monday’s Senate Budget Committee meeting.

It’s not yet clear how that squares with Murphy’s vision for the next year of spending. His budget proposal calls for the first year of revenue from the surtax, dubbed the corporate transit fee, to be used as a one-shot to boost state revenue as New Jersey continues to spend more than it takes through taxes and fees.

Murphy’s budget proposal includes a $1.8 billion structural deficit that will bring the state’s surplus down to $6.1 billion, or roughly 11% of proposed spending.

The eventual fate of the new tax is also unclear. Murphy has pitched it as a dedicated source of funding for the transit agency, but lawmakers have agreed on a proposal to have the tax sunset after five years. The deal was first reported by Politico New Jersey.

That timeline is a boon to business groups that have urged against a surcharge they feared would remain in perpetuity, warning that it would leave New Jersey with the highest tax rates in the nation for highly profitable businesses.

“The problem is, for me anyway, is the regional competitiveness, because Pennsylvania is on a longer-term plan to keep reducing their CBT, and it’s usually those surrounding states of Delaware and Pennsylvania that are our biggest competition,” said Michael Egenton, executive vice president of government relations for the New Jersey Chamber of Commerce.

At present, the 9% rate charged by New Jersey’s top corporate tax bracket is the fourth highest in the nation. Pennsylvania last year put itself on a path to cut its corporate tax rate to 4.99% by 2031.

Neighboring New York levies a 6.5% corporate income tax, or 7.25% for firms with more than $5 million in profit, while Delaware levies an 8.7% corporate tax.

There’s some question as to whether the tax will actually expire. The prior corporate business tax surcharge — which sunset at the end of 2023 — was meant to phase down from 2.5% to 1.5% but never did. It was also initially set to expire in 2021.

“I think the bigger picture is how do we go forward with any of these programs if government is going to say one thing and then ends up doing something else,” Egenton said.

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Governor Phil Murphy and First Lady Tammy Murphy visited and toured a new Planned Parenthood facility in Absecon NJ, Tuesday March 26 2024 (Rich Hundley III/ NJ Governor’s Office)

On the second anniversary of the U.S. Supreme Court ruling that overturned the federal right to an abortion, New Jersey Senate lawmakers advanced the first measure of what they hope to be a nine-bill package protecting reproductive rights in the Garden State.

The bill passed by the Senate Budget Committee Monday would require insurance and Medicaid coverage for abortions and prohibit insurers from taking any retaliatory action, such as raising rates or denying coverage, even if those people seeking care are not from New Jersey.

“We have to look at the state of New Jersey under the worst-case scenario,” said bill sponsor Sen. Teresa Ruiz (D-Essex). “What if the administration changes to someone who’s dramatically far thinking from what we’re thinking today?”

The bill was amended after it was introduced to expand protections for family planning and reproductive health services, which would include abortion, emergency services such as screenings for mothers and newborns, family planning counseling, lab tests, postpartum care for mothers, and medical care for newborns. It advanced by a vote of 9-3, with the Republicans on the committee opposing the bill.

Ruiz is sponsoring eight other bills lawmakers aim to pass in the fall that she said will further strengthen protections for abortion and other family planning methods. While the language for those bills is not yet available, officials say some of the bills would:

• Create a fund to finance clinical training programs and security grants, and direct health officials to identify gaps in access to services.
• Protect the data privacy of people using period tracking apps by requiring consent for disclosure.
• Require Medicaid to cover emergency contraception without a prescription.
• Provide for voluntary contributions for taxpayers on gross income tax returns to support reproductive health care services.

“As we come into the session into the fall, we’ll work collectively together to be sure that every woman, child, and human being is protected,” Ruiz said.

New Jersey saw a spike in abortions after the 2022 Supreme Court decision, known as Dobbs, which overturned the 1973 Roe v. Wade decision that protected abortion rights nationally. Since the Dobbs decision, nearly half of the nation’s states have banned abortions or placed restrictions more severe than those allowed by Roe.

In New Jersey, abortion access is protected by the 2022 Freedom of Reproductive Choice Act. That law codified the right to an abortion for people in New Jersey, which had been previously protected by court precedent.

Senate President Nick Scutari (D-Union), who joined Ruiz Monday to announce the package, said there are “two Americas right now for women that are seeking reproductive care and freedom.”

“There are individuals that had the money, the access, the knowledge to be able to move and go to other places where they can get those services, but there are so many countless others that are just stuck, that don’t know where to go,” Scutari said.

The insurance bill that advanced Monday would allow religious employers to request exemptions, which an insurance carrier may grant if the coverage conflicts with the employer’s beliefs and practices. It would prohibit carriers from excluding coverage for care to preserve the life or health of the mother.

Gov. Phil Murphy is expected to sign the bill. Murphy spokesman Mahen Gunaratna said it is one of Murphy’s priorities.

Pro-choice advocates stood with Ruiz as she announced the bill package. Kaitlyn Wojtowicz of Planned Parenthood New Jersey said there is still more that can be done to “meet this moment in a post-Roe health care landscape.”

“We know the fight isn’t over. Those who oppose our personal freedoms and seek to control our bodies, our health, our futures, will continue to tax on abortion, contraception, gender-affirming care and IVF and more,” Wojtowicz said.

Ruiz said the state should look into a constitutional amendment to protect the codified abortion law from being repealed by lawmakers in the future. Scutari said he “wholeheartedly” agrees that lawmakers should consider an amendment, which would have to be approved by voters.

“Elections have consequences and people don’t, can’t possibly imagine New Jersey changing, but we had a Republican governor for eight years,” he said.

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Passengers board a New Jersey Transit train at Pennsylvania Station on April 26, 2017 in New York City. (Photo by Spencer Platt/Getty Images)

Trains on the country’s busiest commuter rail line stopped running Friday for the third time this week amid scorching heat and persistent technical problems, spawning a new round of finger-pointing.

Rail service in and out of New York Penn Station was suspended Friday morning and delayed into the afternoon — snarling trains on the northeast corridor and other lines as transit officials offered competing explanations for the latest delays.

NJ Transit said issues with Amtrak’s overhead wires were responsible, while Amtrak — which owns the tracks the corridor’s trains travel on — said a disabled commuter train in New York Penn Station was responsible for the cancellations.

“We are working with our partners at NJT to investigate the cause of this morning’s disruption,” said Amtrak spokesman Anderson Kyle.

A spokesperson for the governor deferred a request for comment to NJ Transit, which called the frequency and severity of recent service disruptions “beyond unacceptable.”

The agency said an inspection of the disabled train conducted before it left Newark uncovered no issues, including with pantographs that collect power from overhead lines.

“What we can say is that we operate approximately 700 trains every weekday along hundreds of miles of track on 11 rail lines with the same equipment and these incidents are mainly occurring on just this one stretch of track on the NEC between Newark and New York,” NJ Transit CEO Kevin Corbett said in a statement. “We continue to offer Amtrak our assistance to resolve the issue.”

It has been a rocky week for the two transit agencies.

On Tuesday, train service to and from New York Penn was suspended during the morning rush due to Amtrak wire issues, with delays throughout the day that grew worse in the evening after officials reported a disabled Amtrak train near the station.

A power issue at a substation near train tunnels running into New York Penn caused more wire problems and another set of service suspensions on Thursday, and those were exacerbated by a nearby but unrelated brush fire that delayed wire repairs.

“I know everyone likes to dump on New Jersey Transit, but this is a bigger issue. This is an Amtrak issue, and we really have to bring our federal representatives and state representatives together to address this. This is a number one priority,” said Sen. Patrick Diegnan (D-Middlesex), the Senate Transportation Committee chairman.

Rep. Frank Pallone (D-06), whose district includes a portion of the rail line that runs along the Jersey Shore, on Friday called the service disruptions “utterly unacceptable.”

Throughout the week, Amtrak officials have warned the heat wave battering the Northeast could force trains to run at lower speeds, creating delays of up to an hour during afternoons.

Excessive heat can deform rail tracks and the overhead wires that power trains, and it can cause certain train parts to fail.

“I always had a feeling like once we hit the first heat wave, sh*t was going to go down,” said Assemblyman Clinton Calabrese (D-Bergen), the Assembly transportation chair. “Here we are in the first heat wave, and things are going down.”

Calabrese and Diegnan said they hope the early-summer disruptions do not presage another “summer of hell” of the type that has dogged NJ Transit in recent years.

Amtrak issues have mounted over the past few months. The quasi-public corporation was responsible for 185 of the 381 cancellations NJ Transit saw in May, according to NJ Transit data, though the causes for cancellations can vary widely month-to-month.

Sen. Raj Mukherji (D-Hudson), the Senate transportation vice chair, said the latest issues underscore the need for customer advocacy at NJ Transit, pointing to a bipartisan bill that would create a new independent office to represent riders’ interests on fares and services.

“With everybody pointing fingers and a lack of clarity as to what keeps going wrong, this underscores why we need to pass my customer advocate legislation so that an independent rider advocacy commission can investigate these things and report to the Legislature and the governor and, most importantly, our commuters when things and go wrong what solutions must be implemented,” said Mukherji.

The post Renewed suspensions, delays, and finger-pointing cap rocky week for transit appeared first on New Jersey Monitor.

(Andrii Koval/Getty Images)

A controversial bill that would require the state to adopt a specific definition of antisemitism is scheduled for a vote by a legislative panel Thursday, three days after a four-hour-plus hearing on the bill ended without the committee voting on it.

Supporters of the measure say it’s needed to define the boundaries of hate speech and antisemitic incidents, which have “skyrocketed” since Hamas’ Oct. 7 attack on Israel, according to the Anti-Defamation League. They say incorporating the definition put forward by the International Holocaust Remembrance Alliance into New Jersey’s policies would help fight against antisemitic attacks.

Critics of the bill decried that definition as one that would limit their freedom of speech. During Monday’s remote hearing on the bill, which was attended by more than 600 people, dozens voiced concerns that the definition conflates criticism of Israel and Zionism with discrimination against Jewish people. 

Meera Jaffrey of Jewish Voice for Peace stressed it is not antisemitic to criticize Israel’s government. Several speakers noted the number of people who have been killed in the war in Gaza, including tens of thousands of children. 

“The fact that the state of New Jersey would even consider adopting two bills which would potentially make it a crime to speak out against oppression, apartheid, ethnic cleansing and genocide is alarming,” she said. “Our children deserve to live in a state in which they don’t have to fear standing up for safety, freedom and human rights of all people.”

But bill sponsor Assemblyman Avi Schnall (D-Ocean) said the International Holocaust Remembrance Alliance definition of antisemitism is accepted by the “vast majority of Jews across the spectrum.” 

During Shalom’s remarks, an unidentified person said, “F— you.”

The alliance’s definition of antisemitism includes “claiming that the existence of a State of Israel is a racist endeavor” and “drawing comparisons of contemporary Israeli policy to that of the Nazis.”

Sen. James Beach (D-Camden), chair of the State Government, Wagering, Tourism & Historic Preservation committee, adjourned Monday’s meeting without a vote.

Another bill at the center of the hearing would require the state Office of Diversity Equity, Inclusion and Belonging to ensure the proper definitions of antisemitism and Islamophobia are incorporated into all state policies and laws. They would follow the definitions of antisemitism from the Holocaust remembrance organization and the Islamophobia definition adopted by the United Nations.

The committee was initially scheduled to hear the bills in May, but that hearing was canceled due to security concerns, officials said at the time.

The International Holocaust Remembrance Alliance’s definition of antisemitism has been adopted by 36 other states and countries around the world. The U.S. House of Representatives also approved a bill to adopt the definition in May, though its fate is uncertain in the U.S. Senate.

Gabriella Rubinstein, a lifelong New Jersey resident, a Rutgers University graduate student, and an American Jew, said she opposes the bill.

“We should be allowed to criticize any government or country in the world if it’s doing something that’s illegal or wrong. Doing so is not bigotry, and it’s not antisemitic,” said Rubinstein. “Please don’t say that speaking the truth is hatred towards my people.”

Several other speakers noted the bill says it would not diminish or infringe upon any free speech protections under the First Amendment.

“The detractors of these bills offer no real counter-proposal to combating this alarming rate of antisemitism. The reason being that relying on the false pretenses of First Amendment concerns, detractors seek to continue to bully, harass, and intimidate Jews,” said Cory Rothbart of the Jewish Bar Association of New Jersey.

Jewish residents who spoke during the virtual hearing said they’ve faced harassment in their communities and workplaces following the Oct. 7 attacks on Israel. Many said they are scared to wear necklaces that identify them as Jewish or are fearful of people at work finding out about their religion.

Reports of antisemitic incidents have reached an all-time high around the country, according to the Anti-Defamation League. In 2021, New Jersey saw 370 reports of incidents, ranging from verbal harassment to a swastika sticker found outside a synagogue.

Rutgers University student Joe Gindi said he’s witnessed a “normalization of antisemitism” on campus, like harassment in libraries and dorms.

“Whenever I thought things couldn’t get worse, they did. Students quickly mobilized to make campus a place that’s unsafe for Jews. They celebrated violence and the massacre of Jews,” he said, referring to a short-lived encampment on the university’s New Brunswick campus.

Others think the definition of antisemitism under discussion isn’t going to do much for a community fearful of vandalism, physical attacks, and a growing threat of white nationalism.

“This definition has nothing, absolutely nothing, to do with Jewish safety, and it would divert attention from these threats,” said Rebecca Smith, a Jewish resident of Jersey City.

The hearing will continue Thursday morning at 9 a.m. over Zoom.

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Gov. Phil Murphy speaks about launching a new expedited clemency initiative and establishing a clemency advisory board at Saint James A.M.E. Church in Newark on June 19, 2024. (Jake Hirsch/Governor’s Office)

Gov. Phil Murphy signed an executive order Wednesday intended to speed clemency applications to his desk in hopes of extending pardons to thousands of New Jerseyans in and out of the state’s jails and prisons.

Murphy’s order creates a board that will review clemency applications and make non-binding recommendations about which requests should be granted in an effort to expand grants of clemency beyond friends and allies of the governor, as has often been the practice in New Jersey and elsewhere.

“Historically speaking here in New Jersey, receiving a pardon or having your sentence commuted was not a matter of either fairness or objectivity,” Murphy said at Saint James A.M.E. Church in Newark. “It was a matter of who you knew or how well connected you were to those in power. With the executive order I’m signing today, we are changing that.”

Rapper Meek Mill — real name Robert Rihmeek Williams— spoke at Wednesday’s announcement in support of the initiative. He became a champion for criminal justice reform because of a 2007 arrest on gun and drug charges in Philadelphia that prosecutors later conceded may have been improper. The state’s Superior Court in 2019 vacated the rapper’s conviction, citing credibility problems with the arresting officer.

“Everything you’re talking about — clemency, second chances, giving people a fair shot — I grew up on that side of life, and I never thought I would be in rooms like this,” the rapper said Wednesday. “You guys give me the courage and the energy to use my platform to keep pushing forward to better our communities.”

Murphy’s order comes two days after Maryland Gov. Wes Moore, a Democrat, signed an order pardoning 17,000 misdemeanor cannabis-related convictions (cannabis use is legal in that state for those over 21).

Murphy’s order, which comes after lobbying by the American Civil Liberties Union of New Jersey, directs the board to expedite applications if they pass a two-pronged test based on time and the offense for which they seek a pardon. The governor says he expects the first batch of clemencies to come in roughly six months.

Clemency seekers who are no longer incarcerated would be eligible for expedited review if 10 years had passed since the end of their sentence, including parole, probation, and court diversionary programs. That time bar falls to five years for applicants who are 60 or older or who were no older than 25 at the time of their offense.

They could meet the offense test if the crime for which they seek a pardon was not subject to the No Early Release Act or is no longer illegal.

“Corrections is based upon providing the opportunity for second chances, and our criminal and justice systems must provide meaningful opportunities for rehabilitation and redemption,” said Corrections Commissioner Victoria Kuhn.

The order bars clemency for offenses involving public corruption. Those with pending charges or who have been convicted outside of New Jersey for crimes that would prevent expedited review are likewise ineligible.

Murphy’s order creates a separate process for those who are currently incarcerated. Such individuals would be eligible for expedited review if they were a victim of sex trafficking or domestic violence, they were handed an excessive sentence, or they were convicted of a crime that is no longer illegal or has had its penalties reduced.

Regardless of a person’s carceral status, they are eligible for expedited review if the conviction review unit within the Office of the Attorney General refers the application to the new board for that purpose.

The Department of Corrections will work to solicit clemency applications from those still jailed, Murphy said, while those who have completed their sentences must apply online.

“Sometime in the future, I suspect after I’ve hung my cleats up, there will be an opportunity for somebody to press a button and automatically know who’s eligible or is considering eligibility, but today we don’t have it,” Murphy said. “So, the responsibility’s going to be out there on the individual to come to us.”

The six-member board must include the New Jersey attorney general and five public members, among whom there must be a retired judge, an experienced defense attorney, an expert on clemency, and a victim advocate.

Murphy has selected Justin Dews, a former senior counsel to the governor, as the board’s chair. The panel’s members will serve at the governor’s pleasure and receive no compensation.

“Clemency, whether it be a pardon or a commutation, is transformational,” Dews said Wednesday. “A pardon removes barriers that the law erects. Commutations shortens sentences. What the law says you cannot do, a pardon restores, and what the law says you must face, a pardon wipes away.”

Murphy has not issued any pardons since taking office in early 2018, and executive clemencies are a relative rarity in New Jersey.

Since Christine Todd Whitman became governor in 1994, the state’s executives have issued just 105 pardons and commutations, with most coming at the end of a governor’s lame-duck term.

Chris Christie, who issued more pardons than any governor since at least 1994, issued 15 clemencies in his first seven years in office, pardoned 38 in his last year, and commuted the sentences of three others.

Murphy on Wednesday declined to rule out issuing pardons or clemencies to individuals the board did not recommend should receive them.

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Rotunda in New Jersey Statehouse in Trenton (Dana DiFilippo | New Jersey Monitor)

A new series of financial projections find New Jersey would face smaller deficits in coming years if lawmakers raise taxes to fund NJ Transit — but warn the state is still likely on a path to drain its reserves in a few years under all but the rosiest forecast.

The state would continue to face steep structural deficits under a budget that includes no new government spending other than what is already authorized by law. But those deficits would significantly shrink if the budget includes millions in new tax collections lawmakers have proposed, according to the projections from the Rowan University-based Sweeney Center for Public Policy.

David Rousseau, a former state treasurer who sits on the center’s multi-year budget group, said the report shows we’re seeing a “return to normalcy in New Jersey budgets” — where treasurers year-to-year face the kinds of budgetary pressures they have always faced.

“My guess is since this millennium or even back further than that, at least two-thirds of the budgets during that period of time had a structural deficit,” Rousseau said.

Former Senate President Steve Sweeney founded the center after losing reelection in 2021 but left its board after saying he would seek the Democratic nomination for governor next year.

The group drafted three forecasts. Under its baseline forecast, the likeliest of the three, New Jersey would face about $10.8 billion in structural deficits over the four subsequent fiscal years.

That scenario would see New Jersey drain its surplus to $493,346 by July 2027 and fall into the negatives the following budgetary year. The group’s February forecasts predicted New Jersey’s surplus would go into the red as early as July 2026 in baseline conditions.

Gov. Phil Murphy’s budget proposal projects New Jersey will end the fiscal year that begins July 1 with roughly $6.3 billion in reserves.

The Sweeney group’s pessimistic scenario, which assumes a mild recession the state recovers from, would see New Jersey face $17.7 billion in combined deficits through fiscal year 2028 — roughly $9.6 billion more than state reserves could support.

The state’s surplus would fall $3.7 billion into arrears as early as July 2027 under that forecast, a year later than under earlier forecasts.

“I think the downside risks we were afraid of seem a little less imminent, and the upside plusses seem a little less likely, so it’s a bit of a narrowing of range,” said Charles Steindel, a former New Jersey chief economist.

New Jersey would maintain its surplus, though at much reduced levels, under the Sweeney group’s optimistic scenarios, with combined shortfalls totaling about $7 billion.

The rosiest forecast would leave New Jersey with just $1.1 billion in surplus by the end of fiscal year 2028. That low level of reserves presents fewer pressing issues than an entirely drained surplus, but it could lead to credit rating downgrades for the state and higher bonding costs, though they’re unlikely to be much higher.

“From experience, there is always a demand for New Jersey bonds,” Rousseau said.

Empty reserves also make the state less able to respond to economic shocks, making tax hikes or service cuts more likely in emergencies.

That the more recent forecasts present a slightly more encouraging picture of state finances than the center’s February report is unsurprising. The earlier forecasts assumed New Jersey would annually invest $500 million in NJ Transit beginning this July without raising any new revenue.

Lawmakers have indicated they will bridge the $766.8 million fiscal cliff NJ Transit faces in the budgetary year that begins July 1, 2025, by raising roughly $800 million in new taxes.

Murphy has pushed for those collections to come from a 2.5% surcharge on businesses with more than $10 million in profit, though budget chairs in both chambers have floated raising the state’s sales tax from 6.675% to 7% as an alternative. Both tax hikes would raise roughly $800 million.

“They can’t balance this year’s budget without one of those taxes or cuts,” said Mark Magyar, the center’s director.

Even so, New Jersey’s finances are likely to create a dilemma for lawmakers and the nascent Stay NJ tax credit program for seniors.

Among other things, Stay NJ requires the state to maintain a surplus equal to 12% of spending. New Jersey’s surplus is set to fall below that level in the fiscal year that begins July 1 and is expected to fall further in future years.

But the statutory restriction is far from absolute — lawmakers could simply write it out of law.

“If the governor tells you he wants to get something done, the legislative leaders tell you they want to get something done, you’re going to give them the options to get it done,” said Rousseau. “Now, it could mean you have to do other things and there could be other consequences to those actions, but anything is doable.”

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Climate activist Stephanie Martinez appeared at a rally in Newark on June 13, 2024, to demand lawmakers support a proposed business tax to fund NJ Transit. (Sophie Nieto-Munoz | NJ Monitor)

Humberto Mendoza has taken NJ Transit’s 780 bus from his Passaic home to Hackensack daily for the last 26 years.

The bus rarely arrives on time, he said, but it’s his only way to get to work. With just a few weeks until the start of double-digit fare hikes, Mendoza said he’ll have to choose between paying more for inconsistent transit service or buying food to feed his family.

“It will be too much. We cannot take another increase in price,” said Mendoza, a member of immigrant rights group Make the Road New Jersey.

Local activists and mayors gathered in front of Newark Penn Station Thursday to demand legislative leaders include a new business tax in the upcoming budget to boost the financially struggling transit agency. They also plan to deliver a letter to top Trenton officials signed by dozens of mayors calling it “imperative” to fund public transportation.

“While our constituents face rising costs for transportation and basic necessities, it is unjustifiable that wealthy, multinational corporations continue to receive tax breaks that further exacerbate the financial burden on our towns and cities,” reads the letter, signed by mayors of Newark, Jersey City, Montclair, Trenton, Red Bank, and more.

The new tax was proposed by Gov. Phil Murphy as a transit tax to fill the $106.6 million budget gap that NJ Transit is facing in the fiscal year that begins July 1. Under the governor’s plan, there would be a 2.5% surtax imposed on businesses with more than $10 million in profit. It is expected to generate $800 million annually.

In April, the NJ Transit board approved fare hikes of up to 15% that will go into effect July 1, along with a 3% increase every year after. Without more revenue, NJ Transit could face major service cuts, agency officials have said.

Business groups oppose the new tax, saying it would make the state less competitive in attracting and retaining employers. The New Jersey Business and Industry Association released a list of 40 reasons why the transit tax would be “bad policy.”

The state Chamber of Commerce says the transit tax is just a veiled attempt to rebrand a previous business tax surtax that sunset in 2023, one that placed a 2.5% surcharge on corporations with more than $1 million in annual profits. Tom Bracken, the chamber’s president and CEO, urged the Legislature to reject the proposed tax, saying there’s no way to predict how much money it would generate every year since it hinges on companies staying in New Jersey.

“One thing is for certain, implementing the fee would give the state the dubious distinction of having the nation’s highest Corporation Business Tax rate for large companies, which would tarnish New Jersey’s business reputation and undermine the governor’s own business attraction and retention efforts,” Bracken said.

Some activists worry officials might try to redirect some of the expected revenue to other projects in backdoor deals during the budget-writing process.

“What happens in Trenton in the next few weeks is going to be a litmus test for the state Legislature to make sure that we prioritize the people that elected them to serve in Trenton,” said Hoboken Mayor Ravi Bhalla.

Senate President Nicholas Scutari and Assembly Speaker Craig Coughlin have not said whether they support the proposed transit tax. Murphy must sign the budget before July 1 to avoid a state government shutdown.

Activists said on Thursday they would prefer to bring back the business tax surcharge that expired last year, which affected 3,000 businesses (the proposed transit tax will only hit 300 businesses). They also stressed that NJ Transit faces a budget gap next year that exceeds $700 million.

“Funding NJ Transit means we fund the local economy, where I can get to my local supermarket, access fresh foods, and live a healthy lifestyle. People can get to their jobs safely on time because the working class makes this world go around,” said climate activist Stephanie Martinez.

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People walk along the boardwalk in Ocean City, N.J., Friday, Aug. 11, 2023. (Lori M. Nichols for New Jersey Monitor)

The Wildwood boardwalk is home to massive crowds on summer weekends, and cops say they are used to dealing with tourists and families visiting the beach. But over the last few years, younger visitors have turned more audacious, according to the city’s police chief, Joe Murphy.

Murphy and other police chiefs told lawmakers during a special hearing Wednesday that young people have spit on, cursed at, and assaulted officers in their towns.

“That crowd has turned extremely hostile and aggressive toward uniformed law enforcement officers,” Murphy said.

In the hearing, hosted by legislative Republicans, Jersey Shore town chiefs and mayors urged the state to reassess juvenile detention statutes and pass new laws to punish people who invite hundreds to boardwalks for parties.

Officers complain they feel “handcuffed” by a 2020 directive from then-Attorney General Gurbir Grewal telling officers they should divert young people out of the criminal justice system whenever possible by issuing warnings or adjusting their charges in exchange for a formal promise to perform community service or pay restitution.

Officers and town officials have also complained about a provision in the state’s cannabis law that prohibits cops from arresting people under 21 solely for smelling like weed or refusing to give up their stash.

Wildwood Mayor Ernie Troiano said he assigns 50 officers along his 2.5-mile boardwalk, hoping their presence deters any negative activity, but it hardly helps when young people are “brazen” and “lawless,” he said.

“We’re doing everything we can to put police on the street. We just don’t have them. I don’t see them coming in in the future, the way things are going,” he said.

Ocean City Police Chief Bill Campbell said police departments have had a recruitment problem since the nationwide protests following the police killing of George Floyd in 2020.

“The memory of what they’ve seen as far as these violent protests and demonstrations that have happened from four years ago, moving forward to these unruly juveniles and these pop-up beach parties, et cetera, are tainting the idea of young people to want to get in this profession,” said Campbell.

Sen. Mike Testa (R-Cumberland), whose district includes Cape May, led the hearing. He has proposed several pieces of legislation that would address some of the town leaders’ concerns, including proposals to allow towns to create alcohol- and cannabis-free zones and create new crimes of mob and cyber intimidation. Testa said the Democrat-led Legislature is not interested in the bills.

“It’s trying to get traction from the majority party to get these things done. I wish it were not a partisan issue, it’s not bipartisan — it’s nonpartisan,” said Testa. “It’s about tourism, which again, is the lifeblood of the economy, especially during our summer months.”

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(Illustration by Alex Cochran for New Jersey Monitor)

A Senate panel unanimously advanced a bill Monday that would require Treasury officials to stress test the state’s budget after the pandemic injected uncertainty into New Jersey’s tax collections.

The bill would require the Treasury to project revenue performance and economic conditions in the near– and long-termonce every three years in a publicly posted report that must also include analysis of state spending and how it’s likely to change.

“A critical lesson we must learn after facing this pandemic is to implement cautionary measures for unprecedented and unpredictable circumstances,” said bill sponsor Sen. Shirley Turner (D-Mercer). “This legislation will provide that the economic condition of the state remains well-prepared for any unforeseen crises or economic downturns.”

New Jersey faced a series of uncertain budgetary years as work and markets realigned during the pandemic. Early in the crisis, forecasters predicted revenue would tumble amid shutdown orders that appeared would strike at the state’s income, business, and sales taxes — its most major revenue sources.

Fearing the worst, Trenton Democrats moved to borrow $4 billion to plug the budget hole. Only that budget hole never materialized. Instead, revenue surged as residents received stimulus checks, vaccines were deployed, and stock markets soared.

In June 2021, Treasurer Liz Muoio described the trends as “a year-long revenue forecasting roller coaster ride of deep drops and rapid reversals,” and the good times continued until they didn’t.

The stock market tumbled at the tail end of 2022, driving the erasure of more than $2 billion in expected revenue, according to the Treasury’s May 2023 forecasts. And though officials presented lawmakers with more stable predictions this year, New Jersey’s spending outstrips its tax collections.

“Anything we do to shed more light on our budget process, more light on our spending and revenue situations, I think, is good for all taxpayers and good for you as legislators to give you more information and ammunition as you go through the process so you can best serve your constituents,” Chris Emigholz, vice president of government affairs for the New Jersey Business and Industry Association, told the Senate Economic Growth Committee.

The bill would also require Treasury officials to present methods to defray the impact of recessions in the triennial report. Those methods could include spending cuts or potential revenue raisers, and the forethought is likely to aid policymakers in times of crisis.

“It’s great that they have the options in there because one of the things that occurred during COVID was the Murphy administration had to think of options on the fly,” said Mark Magyar, director of Rowan University’s Steve Sweeney Center for Public Policy.

Magyar added that after the housing crash of 2008, then-Gov. Jon Corzine “had to think about things on the fly.”

Magyar was Senate Democrats’ deputy executive director until early 2022.

The report must also include information about how the state’s major revenue sources perform in economies of varying health. This information might, for example, prevent lawmakers from raising the sales tax amid drops in consumer spending because such hikes might generate less revenue than expected or further depress consumer spending.

The bill is a step toward multi-year budgeting, a budgeting best practice observers have called on New Jersey to adopt as it faced revenue shocks over recent years. It sees officials forecast revenues and expenses out across multiple fiscal years to better understand how decisions made in the current budgetary year will affect state finances in out-years.

“If you think about it, the requirement in the NJ Transit reform legislation that they do multi-year budgeting is one of the reasons everyone was so focused in advance on addressing NJ Transit’s upcoming shortfall when the federal aid runs out,” said Magyar, whose center issues some multi-year forecasts.

Though the bill advanced with resounding support among lawmakers and those who testified, some said the stress tests should happen annually instead of once every three years.

“If we were going to take a projection from 2021 and try to see if that stress test was applicable today, I think we’d say that economic conditions have changed really substantially, so narrowing that timeframe is something that makes sense,” Peter Chen, a senior policy analyst at New Jersey Policy Perspective, which supported the bill, told the panel.

The bill has not advanced in the lower chamber.

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