Murphy tax plans meet skeptical lawmakers, business groups
TRENTON — Gov. Phil Murphy says property taxes are stabilizing in New Jersey and that the next step toward maintaining that progress is hiking income taxes on millionaires in the 2021 budget.
Last year’s property tax bills rose by the fourth-smallest percentage on record, 2.2%, following 2018’s record low, 0.9%, Murphy said. Property taxes increased by $665 million last year, reaching $30.4 billion.
“We can keep this progress going, but only, only with recurring and sustainable revenues. And there is no better alternative than a millionaires tax,” Murphy said.
“It’s easy to see how our middle class can feel cheated. Their tax burden is real and, when put side-by-side with that of the wealthiest in our state, proves to be the exact opposite of fair,” Murphy said. “It isn’t the wealthy who bear the burden of our tax system – it’s the middle class.”
Raising the tax rate on income between $1 million and $5 million from 8.97% to 10.75% is forecast to increase revenues by $493.8 million in fiscal 2021. It’s the biggest tax proposal among more than $1 billion in tax and fee hikes planned for a proposed $40.9 billion state budget.
“What we heard today is increased spending, increased spending, increased taxes,” said Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association. “So while the governor spoke of where he’s saving money in certain areas, at the end of the day the message is increased spending which means increased taxes.”
Many of Murphy’s tax and fee plans – a millionaires tax, a "corporate responsibility fee" on companies whose workers get health coverage through Medicaid, a tax on opioid manufacturers, higher fees for guns, ammunition and bear hunting licenses – were proposed in past year but in the end not approved.
“I don’t support revenue raisers,” said Senate President Steve Sweeney, D-Gloucester. “I said I’m open to the millionaires tax with a caveat – an additional $1 billion” in pension fund contributions.
Among the new tax proposals is a plan to hike the cigarette tax from $2.70 to $4.35 a pack.
Sam DeAlmeida, government relations director for the American Cancer Society of New Jersey, said that’s great – a substantial increase that would help a number of people quit smoking.
“We think it’s a really progressive idea. We’d love to see some of that money go into cessation and programs that help people quit,” DeAlmeida said. “Right now there’s a 1% dedication that goes into those programs. We’d love to see that number upped as well.”
The budget plan would increase spending on anti-smoking programs from the current $5.97 million to just over $7.8 million.
In all, spending is proposed at $40.851 billion, which is 5.5% higher than the budget enacted last June. Republicans say it’s 18% higher than the budget Murphy inherited.
“Spending going up 18% is just absurd. There’s nobody, no resident or citizen, whose budget goes up 18% in a three-year period,” said Assemblyman Hal Wirths, R-Sussex.
“This is the problem when you have a Democratic governor and a Democratic Legislature, they go way off the chart,” said Assembly Minority Leader Jon Bramnick, R-Union. “They get crazy.”
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