Senate GOP says NJ budget windfall should go back to taxpayers
TRENTON – Republican lawmakers say the state should return some of its unexpected surplus exceeding $10 billion to taxpayers, perhaps as either a tax credit or tax cut, as part of assembling the fiscal 2022 budget over the next three weeks.
Members of the Senate budget committee addressed reporters at the time they had expected to be getting briefed on tax collections and COVID recovery spending by the state treasurer, before revenue updates were suddenly scratched in an unusual move.
Sen. Steve Oroho, R-Sussex, the GOP’s budget officer, said it’s “unconscionable” that the Senate and Assembly budget committees didn’t meet, given the unanswered questions and crucial decisions about how to spend or sock away the unprecedented windfall, which also includes over $6.2 billion in federal pandemic recovery funds to be spent over the next three years.
“We still have the proposal out there for how to responsibly use the federal money, but now we need to also have the conversation of how we return money back to the taxpayers,” Oroho said.
“Now we are faced with the situation we have a lot more money than we anticipated,” said Sen. Sam Thompson, R-Middlesex. “And it’s time to give it back to the taxpayers to help reduce their taxes and take care of so many outstanding needs out there.”
Sen. Michael Testa, R-Cumberland, said that in addition to the federal aid, the state has to decide how to spend $4.3 billion from COVID emergency borrowing that wasn’t truly necessary and can’t be repaid early because of the way the debt was structured.
“The time is long past due,” Testa said. “We have 10.6 billion reasons to have a very real conversation about taxpayer justice and that time is now that we need to have this discussion.”
Sen. Declan O’Scanlon, R-Monmouth, said the Murphy administration intentionally underestimated revenue projections so it could convince the courts to allow emergency borrowing and the Legislature to approve higher taxes last fall.
“Government will be hoarding billions and billions of dollars that it does not need. That it will be – as we’ve seen New Jersey government, especially run by Democrats – will be tempted to spend and squander,” O’Scanlon said.
“Give some of this money back to taxpayers right now, when they most certainly need it,” he said.
The state is already planning to pay $500 rebates in July to married-couple family households with incomes under $150,000 or single-parent households with incomes under $75,000. Democrats agreed to the rebates as part of the law hiking taxes on income over $1 million approved last September.
Republicans didn’t specify how the Legislature should structure the delivery of the relief to taxpayers or how much money should be returned. O’Scanlon said if it’s a credit, it would have to be made clear that it might be a one-time payment that’s not sustainable.
“But it should be high on everybody’s list, giving some of the money back,” O’Scanlon said. “It is, we don’t think, even remotely on the radar of this administration.”