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Feb. 10 to 16
Federal Presence in NJ
Washington is engaged in a massive change of federal government structure and employment. Whether or not you favor the actions of the Trump administration, it probably will not happen without some significant impacts in New Jersey and even in Cape May County.
This week the state’s Grants Management Office released a report that showed New Jersey received more than $22 billion in federal revenue in fiscal 2024. That money, according to the GMO, supported 609 state-administered programs that ranged from housing, food assistance, prisons, environmental repair to health and drug programs and mental health services, just to mention a few. Medicaid was the largest of the federally supported programs, at $13 billion in 2024. The federal Department of Education also puts $1.2 billion into New Jersey.
The state has produced a detailed picture of the programs supported with federal dollars and the level of that funding in various state departments. The table of contents of the more than 300-page report goes on for 11 pages.
The federal Office of Personnel Management reports that there are roughly 25,000 federal agency civilian employees based in the Garden State, along with almost 10,000 Department of Defense employees and just over 52,000 federal retirees. Closer to home, the office reports 8,553 federal employees in New Jersey District 2, represented by Congressman Jeff Van Drew.
Postal Service aside, two of the largest concentrations of federal employees in the state are involved in Veteran Affairs services (3,396) and the Federal Aviation Administration (1,622).
The Governor’s Office also notes that 15% of the state workforce is federally funded. Federal land policy shows almost 4% of the state’s land is owned by the federal government.
The point in these numbers is that they can and probably will be used to praise or condemn the changes occurring in Washington. What the latest reports really show is that the intertwined relationship between the state and the federal government means any significant change in federal structure, funding or purpose will probably reverberate in the Garden State in ways that at this point are murky at best.
State Budget Hole
On Feb. 25 Gov. Phil Murphy is scheduled to unveil his last state budget. It is no secret that this budget is in trouble, with some reports that it has a $3.7 billion hole that needs to be closed. State law requires that the budget must be in balance when the fiscal year begins. The state does not have the same luxury as the federal government of running with a deficit.
This means that in addition to its own budget hole, state officials are starting from a difficult place if changes to federal funding occur. Republicans say Murphy is digging a deep hole for the next governor, whom they hope will be from their party.
Murphy has already told department heads to plan on at least a 5% cut in budget levels in the fiscal 2026 budget that begins in July of this year. The portion of the deficit that cannot be closed through spending cuts will most likely have to be covered by dipping into the state’s surplus. A Pew Trust analysis shows New Jersey with the largest gap between annual revenue and annual expenses of the 50 states.
The current state budget, with a record $56.6 billion in spending, uses $2.4 billion in surplus funds and runs with a $2.1 billion gap by spending more than it collects in taxes and fees. On the positive side, credit agencies like Moody’s have been impressed with the state’s full pension payments under Murphy. Moody’s upgraded the state from stable to positive earlier this year. It is an improvement, but the state has not had a triple A rating since the early 1990s.
Watching the state budget may be required viewing for municipal chief financial officers since trouble in Washington that leads to trouble in Trenton can mean property tax increases locally.
Electricity Prices Rising
The financial news this week kept getting worse.
In a Feb. 12 announcement the state Board of Public Utilities certified the results of the 24th annual electricity auction for basic generation services. The result will be an increase of 17.2% in the electric supply rates portion of consumers’ bills starting June 1.
Almost immediately, Van Drew called for the resignation of the entire board. Meanwhile, the Offshore Wind Alliance, an offshore wind industry-sponsored group, argued that the rate hikes were the result of a demand and supply imbalance that was made worse by the relentless opposition of groups supported by Van Drew that delayed the contribution that wind energy could have made to the state’s energy supply.
As if the 17% increase were not bad enough, looming on a future agenda of the BPU is an 8% rate increase request from Atlantic City Electric aimed at recovering capital investments the utility says it has made in the distribution network in its coverage area. The BPU is scheduled to rule on that request in April.
The rates will kick in just as the Cape May County summer season gets underway and when usage levels rise normally. Add to this the fact that state data show the 10 warmest New Jersey summers on record have all occurred since 2005, and the pain and outrage of last summer’s high electricity bills are likely to return.
New Jersey Rate Counsel Brian Lipman called for a “nuts-to-bolt” revaluation of what ratepayers are paying for. For a long time, Lipman has been critical of state policymakers who have allowed the costs of the state’s electrification initiative to fall on the shoulders of residential ratepayers. Lipman calls ratepayers “captive customers.”
Week in Review
*Some local residents who would like the opportunity to video-record Ocean City Planning Board meetings met resistance when they tested the waters on Wednesday, Feb. 5, but they ultimately found out that such recording is permitted, subject to reasonable rules.
*A Millville woman is charged with killing her sister in Upper Township in 2023 and attempting to make it look like a drug overdose, according to the affidavit of probable cause related to her arrest.
*Stone Harbor residents chastised the Borough Council Feb. 4 for its lack of transparency. The argument was that a true commitment to transparency encompasses not just access and meeting times but also keeping the public aware of what a governing body does and why it does it.
*Cape May County’s four townships, which house 64% of the county’s permanent population, hosted fire district elections on Saturday, Feb. 15. A total of 14 fire districts asked voters to approve a combined $8.9 million in taxes to support their 2025 budgets. (Results not available before press time.)
*Cape May County Assemblymen Antwan McClellan and Erik Simonsen say the latest bad news for New Jersey’s offshore wind strategy represents a big win for the state’s residents.
*The Stone Harbor Borough Council has made changes to the membership of its Flood Mitigation Committee.
*During his State of the City address last month, Cape May Mayor Zach Mullock announced that $40 million was authorized by federal legislation aimed at making the city’s new and expanded desalination plant a reality. But the funds must now actually be appropriated by Congress, and that can take time.
*The Middle Township Committee has awarded a contract for a study of Beach Avenue and Reeds Beach Road to identify flood mitigation strategies and whether those strategies might be eligible for Federal Emergency Management Agency funding.
*A man was shot and killed at a residence on East Cresse Avenue in Wildwood Crest on Wednesday, Feb. 12, and the man who is charged with his death is in the county jail.
*The Cape May City Council is planning for an estimated $2.2 million bond ordinance to fund preservation work at the city-owned Emlen Physick Estate.
*The Upper Township Committee had a temporary administrator on Monday, Feb. 10, as Joe Verruni of Jersey Professional Management sat in for Gary DeMarzo, who was removed from the position on Jan. 27.
*The county commissioners have imposed restrictions on what residents can say – and how they say it – during the public comment portion of their meetings.
Spout Off of the Week
Court House – It is time for citizens to attend county commissioner meetings. It is time to inform our commissioners they were elected by citizens. They will be held accountable for their actions. Citizens have the right to petition government for the redress of grievances, concerns and complaints. We are not little children. We are grown adults who pay taxes, fund schools and fire companies, and also fund county functions. I do support a speaking limit of ten minutes, and I also favor 6 pm. Meeting times, live zoom access, and live chat functions. How dare our elected officials treat us in this manner
