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From March 3 to 9
Cannabis Tax
In his record $58.1 billion state budget for fiscal year 2026, Gov. Phil Murphy is seeking to raise the tax on cannabis cultivations by 500%. The revenue from this tax goes into a dedicated fund for social equity programs and investing in communities that suffered from the previous ban on marijuana. It is a fund that has almost $7 million in it to date, none of which has been allocated to a single program.
In December the Cannabis Regulatory Commission raised the current fee from $1.24 to $2.50 an ounce, a 100% hike. That makes the current tax $40 per pound of cultivated product. What Murphy’s budget message seeks is another, much more significant hike, to $240 per pound. It is a 500% increase on top of the 100% increase that already occurred to feed a fund that has sat idle for three years.
Murphy also wants to add the tax to the growing of intoxicating hemp products that contain delta-8 and delta-10, chemicals that have effects similar to THC.
The governor says the changes would bring in $70 million in revenue. Even though there is no evidence of a plan for the funds already collected and no clear intent for the higher revenue these changes would produce, one thing they do accomplish is add revenue to a budget badly in need of balance.
The record budget proposed by Murphy includes spending more than the expected level of revenue the state will take in. Republicans say the budget papers over and leaves structural deficits for the next governor to grapple with.
The law requires that the budget passed for fiscal year 2026 must be balanced. An extra $70 million here, an extra $322 million in supplemental real estate transfer fees, new taxes on online gambling and sports betting, alcohol, and new taxes on guns and ammunition.
The proposed hike in the cannabis tax is likely to meet headwinds in the Legislature, where Senate President Nicholas Scutari has already expressed strong opposition. Scutari’s concern is that legal prices in New Jersey are already 30% to 40% higher than those in the illegal market for marijuana. This hike, he says, could drive more users back to illegal buying.
This debate and others regarding Murphy’s budget proposal come as all 80 seats in the Assembly are on the ballot in November. The law requires that the state have a budget in place by July 1.
State Health Benefits
At a special meeting on Feb. 26 the Middle Township governing body passed a resolution pulling the municipality out of the state health plans for local employees and retirees. Faced with a 17% increase in premiums after two years that saw a combined 27% hike, the township became the fifth municipality in the county to leave the state plans in favor of private insurance. Since plan year 2023 the governing bodies of Ocean City, Avalon, Cape May City and Sea Isle City have all taken similar action.
The state of New Jersey maintains two separate funds for health benefits, one for state employees and another for local government employees. Since 2022 the premium hikes for local government workers have created enormous problems for local budgets since the majority of those premium increases are paid for with taxpayer dollars.
With this tendency of municipalities to withdraw from the state system in search of better premium costs, the state plans are seeing enrollment declines and a higher proportion of high-risk towns in the system they must fund. The towns that leave tend to have histories of health-care usage that support lower risk designations, which help in obtaining affordable private insurance premiums.
New Jersey created the State Health Benefits Plan in 1961 for state employees. It was opened to local and county employees in 1964. With cash flow issues and enrollment declines among the local employee groups, the state plan is increasingly strained.
Political Bosses at It Again
The county line format for New Jersey’s primary ballots is dead. Litigation by now-Sen. Andy Kim in 2024 won a limited ruling from the court that outlawed the ballot format for one party, the Democrats, and one year, 2025. But the result made clear the precarious legal position of the county line.
The unique ballot format had given power to county party committees, which could determine who was endorsed by the committees and therefore whose name received a prime position on the ballot.
New Jersey counties must now group candidates by the office for which they are running and not on the basis of their endorsement or lack of it. But with the primary elections coming up in June and all 80 seats in the Assembly up for grabs, the Legislature had one more try at pleasing the party bosses and boosting the chances of reelection by incumbents.
Murphy is seldom quiet when he signs legislation, but the statute he signed on March 6 evoked no comment from the governor. The legislation does require county clerks to print ballots that group candidates by the office they are seeking. It eliminates the controversial county-line system. However, a number of good government groups were less than happy when Murphy did not exercise his right to use a conditional veto with respect to aspects of the bill.
Nuzhat Chowdhury, director of the democracy and justice program at the New Jersey Institute for Social Justice, claims the new format dictated by the bill still “puts a thumb on the scale.”
Among the issues critics cite is the fact that the legislation ends the election of members of the state party committees, allowing those individuals to now be selected by partisan committee members. The bill also allows candidates to bracket with each other and have their ballot position be determined by a single draw, rather than having each individual subjected to a separate draw.
The new rules take effect immediately and will impact the June primary ballots, when the Assembly seats and the governor’s office will be before the voters.
Week in Review
*The attorney representing the tenants of 230 of the 317 sites at the Shawcrest Mobile Home Park and Marina was in court on Friday, Feb. 21, telling the judge why his clients’ case against recent rent hikes should be argued in the Law Division rather than in Landlord/Tenant Court.
*Cape May County’s proposed $224.2 million budget for 2025, which calls for a 4.5% spending increase over last year, was introduced at the Feb. 25 county commissioners meeting.
*Teagan Emmer of Court House has been honored by the Cape May County commissioners for being named the 2024 Mid-Atlantic Region Under 14 Irish Dancing Champion.
*A Villas man was arrested Tuesday, March 4, and charged with lewdness after allegedly being seen naked by several juveniles.
*Cape May County school districts will be getting an overall 1.6% increase in state aid for K-12 education in the fiscal year 2026, which begins July 1, under Gov. Phil Murphy’s proposed budget.
*The Lower Township Police Department has arrested four teenagers in connection with vandalism discovered about nine days earlier.
*Sea Isle City will have a contested municipal election this year: Two incumbents, joined by a former city official, will face off against a slate of two candidates running under the slogan “Fresh Faces – Fresh Ideas.”
*The students at Lower Cape May Regional High School have spoken, and they want their bagels.
*Stone Harbor Borough Engineer Marc DeBlasio, in response to a request from Mayor Tim Carney for an update on the 97th Street playground renovation, said the play area will definitely be ready for the summer season.
*Cape May City Manager Paul Dietrich is warning property owners that a failure to obtain a mercantile license for short-term rental properties will result in punitive action by the city.
*A business owner tracked a white pickup truck that had crashed into materials stored on his Dennisville property to Lower Township, where, he said, the driver was detained by police hours after he fled the scene.
*The Cape May City Council is moving to reduce the likelihood that construction debris and other trash will blow off vehicles as it’s being taken to disposal sites.
*The Middle Township Ambulance Corps needs rescuing: It says it may not be able to survive without a significant financial boost from the township.
*If you hear the baying of bloodhounds in the distance, not to worry – it’s not a manhunt, but rather the sheriff’s Bloodhound Academy conducting training from March 10 through March 14.
Spout Off of the Week
Cape May – What stinks is, how are these younger folks ever going to be able to buy a home here? With an average job, our local youth will be forced to qualify for mortgages upwards of half a million dollars, in the Villas even. Crazy.
