Digital/Tech

Legislature Passes Tax Incentive Program for Artificial Intelligence – On June 28, both houses passed S3432, legislation that establishes Next New Jersey, a tax incentive program to encourage artificial intelligence (AI) development. Under the Economic Development Authority-administered program, businesses which collect more than half of their revenue or devote more than half their staff to AI development could claim tax incentives of up to $250 million for projects that engender at least $100 million in capital investment or 100 jobs. $500 million would be set aside for tax incentives in the first year. The funding would come from the Aspire program, a separate tax incentive program meant to support gap financing for certain projects. The proposal now awaits Gov. Murphy’s signature. 

 

Environment

Advocates Call for Environmental Regulation of Urban Warehouses – A new report prompted calls for legislation to mitigate the pollution caused by warehouses in urban areas. The study, released by the Environmental Defense Fund and Clean Water Action on June 14, found that a third of NJ’s population lives within a half-mile of a warehouse – and the chances of living near a warehouse increase for residents of low-income communities and communities of color. In response, advocates from groups such as the South Ward Environmental Alliance have called for support of the Warehouse and Port Pollution Reduction Act, which would require the assessment and reduction of emissions from warehouses, especially from those in communities hardest hit by pollution. Legislators plan to introduce the bill in both houses imminently. 

 

Housing

Senate Committee Advances Plan to Facilitate Evictions of Hotel Guests – On June 17, the Senate Community and Urban Affairs Committee advanced S3171, a bill which distinguishes between short- and long-term hotel residents to facilitate evictions of hotel guests for non-payment. In order to access tenant protections, hotel stayers would have to prove residency by demonstrating they had stayed in the same room for at least three consecutive months and intend to stay longer. The proposal responds to hotel and motel owners who say that protections for those living in hotels signed into law by Gov. Murphy in 2021 have made it more difficult to evict non-paying guests. Advocates fear the proposal would exacerbate homelessness, as hotel and motel rooms fill an important gap created by a shortage of shelter space in the state. 

 

Public Administration

New Budget Passes with Record-High Spending and Structural Deficit – On June 28, legislators approved, along party lines, a 2025 fiscal year budget, averting a government shutdown. The plan sets a record spending high of $56.6 billion and contains a structural deficit of $2.1 billion. Here are some of the key takeaways: 

  • By the end of the 2025 fiscal year, the state’s budget reserves will be reduced to $6.2 billion, down from $10 billion at the beginning of 2024. Because this year’s budget relies on one-time revenue sources, the deficit could increase to $3.5 billion in the following fiscal year. 
  • The budget contains various changes to taxes and fees to grow its revenue, including the recently approved corporate transit fee, NJ Transit fare hikes starting on July 1, the elimination of a back-to-school sales tax break, new gun fees, and other changes. 
  • The budget maintains full funding of the state’s pension obligations and fully funds school aid for the first time since the funding formula was enacted in 2008. 
  • The budget maintains investment at $220 million in the StayNJ property tax program, which plans to halve property tax bills for homeowners over 65 once it begins. The allocation exceeded by $20 million, the legally required amount. It proceeded despite a clause that requires a pause in investment if the state cannot maintain a budget surplus of 12% of its annual spending. 

Transportation

Five-Year Corporate Transit Fee Approved to Fund NJ Transit – On June 28, both houses and Gov. Murphy approved legislation creating a corporate transit fee, now codified as P.L.2024, c.20. The fee imposes a 2.5% surcharge on corporations making a profit of over $10 million annually to fund NJ Transit, which faces a $766.8 million budget deficit in the coming year. The fee will apply retroactively to the first six months of 2024 and sunset in five years. Approximately 600 businesses are expected to pay the fee, generating an anticipated $1 billion in revenue in the first year. Representatives from south Jersey have spoken out against the initiative, stating their constituents cannot access the transit system they help fund. Gov. Murphy has also proposed a plan for the state’s Economic Development Authority to purchase land from NJ Transit to raise urgently needed funds for the agency.

Women/Children

Senate Passes Bill Requiring Insurance Coverage for Reproductive Healthcare – The Senate passed on June 28 the first in a series of bills that aim to protect reproductive rights in NJ following the U.S. Supreme Court decision ending the federal right to abortion in 2022. S3452 would require insurance and Medicaid coverage for family planning and reproductive health services, including abortion, with religious exemptions available to employers. The bill now awaits review in the Assembly Financial Institutions and Insurance Committee. Other initiatives in the nine-bill package include proposals to fund clinical training programs and security grants, to protect the data of period-tracking app users, and to require Medicaid to cover emergency contraception without a prescription. NJ codified the right to abortion in 2022 with the Freedom of Reproductive Choice Act; lawmakers have discussed advancing a constitutional amendment to enshrine the right to abortion in the state.