Gov. Phil Murphy on Monday said he will sign a bill lawmakers sent him that would push back the deadlines for the state budget from June 30 to Sept. 30, and for tax filing from April 15 to July 15, as the COVID-19 pandemic grounds commerce to a halt, drives up unemployment and decimates state and local tax revenue.
Still, both the governor’s office and legislative leadership have shown restraint against calls to extend the May 1 property tax deadline, arguing that the decision might better rest with local town, city and county governments.
“As we continue to battle the COVID-19 pandemic, it is imperative that we give both the state and our residents every opportunity to endure financially,” Murphy said in a Monday afternoon statement. “Pushing this deadline into the summer will give us additional time to combat the virus and get as many taxpayers as possible back on sound financial footing.”
Senate Bill 2338, known as the “COVID-19 Fiscal Mitigation Act,” requires Murphy to present a revised budget address by Aug. 25, which would include estimates on how much money the state will have through Oct. 1.
The measure was approved by an 80-0 vote in the Assembly and a 38-0 vote in the Senate on Monday, both of which held their sessions remotely.
His initial budget in February, prior to the pandemic, called for $40.9 billion in spending supported by $42 billion in revenue. But the state treasury has frozen $920 million in spending through June 30, as money is lost in the sales, income, corporate business, casino and gas taxes.
Lawmakers will have to approve stopgap spending to last through Sept. 30, and according to Senate President Stephen Sweeney, D-3rd District, the state could likely borrow money for the short-term spending bill.
“We were well ahead of projections” prior to the outbreak, Sweeney told reporters following the voting session.
The legislation gives the state treasurer until May 15 to present lawmakers with a financial analysis that will look at how much money the state made since July 1, 2019, any state or federal spending through Sept. 30, and an assessment of how Murphy’s 2021 budget could be affected by the current recession.
“We’ve got to get an idea. We don’t want to guess,” Sweeney said. “[B]efore we run around doing any kind of borrowing, we need to know where we are financially.”
Matching the federal tax deadline
S2338 also pushes back the filing date for the state income and corporate business tax from April 15 to July 15 – the same deadline as the federal tax deadline.
The bill extends by six months the interest that taxpayers receive on overpayments, and gives the state an extra 90 days after the state of emergency ends to assess the taxes.
Any legislation that would extend the county and municipal property tax deadline from May 1 to July 15 is unlikely, according Sweeney.
The 90-day grace period for mortgages, which often have the property tax bill baked into the amount landowners pay, will already take a bite out of local revenue.
As an alternative, the 18 percent late-payment penalty interest could be waived by up to the entire amount, Sweeney said.
“Hopefully towns will adopt a policy if you can demonstrate that you’ve been unemployed… that you’re not in a position to make a payment, they can reduce the interest or eliminate the interest,” Sweeney told reporters on Monday.
Murphy has suggested the state would need upward of $20 billion to plug holes in its budget. The $2.2 trillion federal stimulus bill includes $3.3 billion for New Jersey, but most of it was bound to spending on COVID-19 efforts so as to offset those expenses for the state.
The National Governors Association last week began pushing Congress to allocate $500 billion for that specific purpose.
“We must be allowed to use any state stabilization funds for replacement of lost revenue,” reads the NGA statement, jointly issued by New York Gov. Andrew Cuomo and Maryland Gov. Larry Hogan.
Editor’s note: A previous version of this story said Senate Bill 2338 gave the state treasurer until May 15 to present lawmakers with a financial analysis examining how much money the state made through July 1, 2019; that was incorrect. Senate Bill 2338 gives the state treasurer until May 15 to present a financial analysis of how much much the state will have made since July 1, 2019. The post was updated at 9:30 a.m. EST on April 14, 2020. A previous version of this post indicated that S2338 gave taxpayers extra time after the end of the state of emergency to asses taxes; that is incorrect. S2338 gives the state an extra 90 days after the state of emergency ends to assess taxes. It was updated at 12:31 p.m. EST on April 14, 2020.