Legislature not ruling out Murphy’s proposed $1B in tax hikes
PISCATAWAY – Gov. Phil Murphy’s budget plan includes some familiar tax increase plans, such as on income over $1 million. The difference this time is that Democratic legislative leaders aren’t necessarily opposed.
In all, Murphy is seeking just over $1 billion in tax increases, with roughly half aimed at well-to-do residents. He said those who continue to prosper while the pandemic rages can afford it.
“That means the wealthiest among us – millionaires and large corporations – need to pay their fair share in taxes, whether it be on income or everything up to buying a yacht,” Murphy said in a speech outlining his revamped budget proposal for fiscal 2021.
Lawmakers now have five weeks to get a spending plan enacted by the Oct. 1 start of the new budget.
“I’m not excited about taxes, period, but you can’t rule anything out right now. That would be irresponsible,” said Senate President Steve Sweeney, D-Gloucester. “We’ve never been in a place like this, so we got to look at everything.”
“We will keep an open mind as we understand every option and proposal must be thoroughly reviewed and vetted,” said Assembly Speaker Craig Coughlin, D-Middlesex. “All options are on the table.”
Without committing to specific details, state Sen. Paul Sarlo, D-Bergen, said the final budget will include borrowing, tax hikes and spending cuts, which is the mix the governor envisions.
“Raising taxes should be a last resort. That’s not going to solve the problem. It’s going to be a combination of some borrowing, some very, very targeted revenue raisers and of course cuts. And $1.25 billion was a good start,” Sarlo said.
Murphy’s nine-month budget would spend $32.4 billion. Combined with what was allocated for July through September, spending over the 12 months would be a bit over $40 billion – an increase of more than $650 million over last year’s adjusted spending.
Assembly Minority Leader Jon Bramnick, R-Union, said spending would rise 4% despite what he said “is the worst economic times probably in the history of New Jersey.” On top of that, he said, Murphy wants to layer on another $1 billion in tax increases.
“This was a political speech, 100% political, and he forgot one interest group – the taxpayers of the state of New Jersey,” Bramnick said.
To follow social distancing rules and limits on indoor gatherings, the budget speech moved from the Statehouse to SHI Stadium, where Rutgers University’s football team plays. That gave Bramnick an opening.
“Take a picture of the stands,” Bramnick said. “This is what New Jersey’s going to look like if we continue to follow the tax and spend policies of Gov. Murphy.”
Assemblyman Hal Wirths, R-Sussex, joked that the state is going to need a quarantine to keep residents from moving away.
“Eight new taxes during the worst recession,” Wirths said. “New Jersey residents don’t have the luxury of going out and borrowing $9 billion, even as they’re the ones that’s going to foot the bill.”
In addition to two taxes aimed at people with incomes over $1 million, Murphy wants to make permanent a surcharge on corporations and raise taxes on cigarettes, limousine rides, boat and yacht purchases, HMO premiums, guns, ammunition and opioid manufacturers.
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