With state coffers hit by COVID-19, the $7.6 billion spending plan signed by Gov. Phil Murphy on Tuesday was described by his office as "bare bones" and will impact various state departments.

S-20/A-3 authorizes the "deappropriation" of nearly $1.2 billion in funds enacted in the FY 2020 Appropriations Act, does not include nearly $850 million in new spending proposed in the governor's February budget message or any new revenue raisers, and defers a number of significant payments—all due to the pandemic-induced lockdown that shut off key tax revenue streams.

The Governor's Office said the supplemental appropriations bill includes a 5% across-the-board reduction in funding for nonsalary operating costs and a 10% reduction in discretionary grants. It also includes savings from delaying cost-of-living adjustments as part of the agreement negotiated between the governor and the Communications Workers of America signed earlier in June.

The new budget legislation makes the following deferments and includes the following elements, according to an announcement Tuesday from the Governor's Office:

• Community Affairs: Delays September 2020 payments for Consolidated Municipal Property Tax Relief Aid and Energy Tax Receipts until October 2020;
• Education: Continues to implement the school funding formula designed in partnership with the Legislature without any additional funding over FY 2020; delays the Sept. 22 school aid payment into October; and defers the September school choice payments;
• Health: Provides the same overall funding for hospitals as the first quarter of FY 2020 (charity care, graduate medical education), but the distribution may vary because funding will be allocated based on FY 2021 data;
• Labor and Workforce Development: Includes $3.9 million to modernize unemployment processing;
• Higher Education: Maintains tuition assistance programs for post-secondary students, including Tuition Aid Grants, the Educational Opportunity Fund, and Community College Opportunity Grants, at their FY 2020 funding levels, and includes $52 million in operating aid for senior public higher education institutions and almost $14 million in operating aid for community colleges;
• Transportation: Does not include any state subsidy for NJ Transit due to $1.4 billion in federal CARES Act funding being provided to the agency;
• Treasury: Does not include Senior Freeze or Homestead Benefit payments and delays the September pension payment into October.

The three-month spending plan is supported by $8.6 billion in total resources, and ends with a projected surplus of $956 million through Sept. 30, according to the release.

The revised surplus includes the transfer of the entire $421 million Surplus Revenue Fund (also known as the "Rainy Day Fund") to the General Fund, and is an increase of $462 million from the May 22 budget update, according to the Governor's Office.

The office said the improved revenue forecast is primarily due to sales and use tax revenue exceeding expectations as a result of the incremental reopening of New Jersey's economy. But there's still uncertainty as to whether taxpayers will request extensions beyond the already extended July 15 deadline for personal income tax filings, or claim refunds for overpayment of corporation business taxes, according to the release.

"We have been working around the clock since this crisis hit to get a handle on the state's continuously evolving finances," State Treasurer Elizabeth Maher Muoio said in a statement. "The one certainty forecasters can agree on at this point is that uncertainty lies ahead and we must prepare for that.

"Unfortunately, this means we must brace ourselves for more painful decisions on the road ahead," added Muoio.

Murphy said the three-month spending plan provides sufficient funds to support the projected need for social service programs through the end of September and 25% of the annual need for operating costs that were left intact.

Murphy said his administration and the Legislature must now work on crafting a nine-month budget for fiscal 2021, which will run from Oct. 1, 2020, through June 30, 2021, as stipulated by S-20/A-3.

Republicans contend the new budget lacked any input from Republican legislators and why none voted for it during Monday's voting sessions in the Assembly and Senate.

"Trenton Democrats have refused to work across the aisle to create a reasonable and affordable budget proposal to get New Jersey back on track after it was impacted by the public health emergency," Sen. Jim Holzapfel, R-Ocean, and Assemblymen Greg McGuckin, R-Ocean, and John Catalano, R-Ocean, said in a joint statement on Tuesday.  "We could not support a budget that values partisan politics over the best interests of the people, which is why we voted against Governor Murphy's $7.7 billion budget extension."