During his address, Governor Murphy made several references to the volatility in Washington.

Going even a step further, saying there's a real possibility that his administration will need to pursue a, quote, break the glass strategy, but didn't try to predict what cuts President Trump or Republican Congress would make over the next year.

It makes negotiating this budget all the more difficult.

As lawmakers now kick off a long process of haggling over the numbers, which could result in significant changes come June.

For more on that, I'm joined by New Jersey State Treasurer Elizabeth Maher Muoio.

Madame treasurer, good to talk to you.

I want to start first with, the federal level.

The House last night passed a budget resolution that many, including many here in new Jersey, are anticipating will include cuts for major programs like Medicaid, to name one.

How much are you anticipating having to scrap the numbers in your spending bill, given what's happening in the federal climate?

It could have, a drastic effect based on what we're hearing in terms of numbers just on Medicaid alone.

It's for supports we receive from the federal government.

We could be seeing north of $5 billion.

And when you add in hospital, cutbacks, that will be much more.

And that's just on Medicaid.

Is there a plan B?

This is a national concern, not just new Jersey.

So, our hope is those cuts aren't implemented, but it's disheartening that that passed last night, that bill.

And we're going to have to keep looking at because, again, our choice will be we either step in and try to fill the gap as a state.

The budget the governor introduced yesterday has a $6.3 billion surplus, which, is a is a great improvement from when the governor took office.

When we came into office, the surplus was around 400, a little over 400 million.

Our surplus, now that we have been building up and budgeting towards is 15 one five times greater than that surplus that we inherited.

That gives us some opportunity to help address needs is they you know, it's meant to address rainy days, right?

But it would not make, you know, it could only go so far in order to keep that surplus in order to make this spending possible.

You all are counting on about $1 billion, coming in through new revenues, new taxes, new fee hikes on everything from cigaret and alcohol taxes, to taxes on, on drones.

There's been a lot of pushback, as I'm sure you have, been seeing, especially from business and labor communities, about these being passed on to residents directly at a time when affordability is such a major concern.

How do you respond to that?

It's never the budget that ends up being signed into law.

We now kick off a process where people who have concerns about the budget, there will be public hearings with the budget committees.

I mean, the public.

And then we will we will all meet.

And that's true.

Last year's budget added an extra billion dollars on top of the spending plan in supplemental, spending.

And so that affordability concern again, being raised with folks who are seeing these numbers and wondering, if that number is going to inflate even more by the time the legislative process is done in June.

Right.

And again, there will be a lot of moving parts going through this process.

The resources available every year is different.

We could find out within the next month based on federal actions, that the resources available this year will totally change.

So, budgeting is kind of a fluid plot process until that that Appropriations Act is signed.

As you know, at the end of June, so we're going to have to have our eyes all across the board and figure out where the pieces are moving.

And there's going to have to be a call made in June about where we're going to make our investments.

Let me let me ask you about that then, Madam Treasurer, and we'll we'll end on this.

The 4.3 in direct property tax relief, we have this new program staying to help keep seniors in the state.

It's about $600 million.

But yesterday when I spoke with the Assembly budget chair, she seemed to indicate that she doesn't really know if there's long term sustainability there.

And so given that context, if it appears that this program could be one and done with the volatility in Washington, the fact that there's not necessarily dedicated spending for it after this fiscal year, why prioritize that investment now?

Is this the right year to be doing that?

Well, we're following the law that was enacted by the legislature that we have the, combined application people are now applying for stay.

The application was rolled out in February.

We have been putting money in for the past two fiscal years.

And now this is the third, payment that gets us to 600 million to pay for that first fiscal year of FY 26, which, as you noted, is a half a year for the program.

You know, going forward into 2027, again, it's it's going to be fluid.

We're not going to know what resources we have.

Five years ago, we introduced a budget at the end of February.

And two weeks later with COVID, it wasn't worth the paper it was printed on because we had to start all over from scratch.

So, you know, this could be a similar experience based on what we see coming out of, unfortunately, you know, maybe a similar experience in terms of budgeting.

Based on what we see coming out of, of, DC, we may have to again, sort of move the resources around and make up for gaps that are created.

So it's an uncertain time.

It it's good to be sure.

Yeah I know yesterday's that a big question mark.

Madam Treasurer, thank you so much for your time.

Good to talk to you.

Good talking to you too, Brianna.

Thank you.