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Republicans serving on the Senate Budget & Appropriations Committee introduced a resolution May 26 to amend Gov. Phil Murphy’s Fiscal Year 2023 $48.9 billion budget proposal.

NJBIZ has extensively reported on the ongoing budget battle in Trenton (see included index of stories), with a projected windfall of nearly $11 billion dollars in tax revenue surplus and federal funds at the center of the current debate.

“Senate Republicans have offered a detailed budget plan to make responsible use of an unprecedented $11 billion windfall of state and federal taxpayer funds to support struggling families, solve long-term problems, and ensure that New Jersey is well prepared for the next recession,” said Sen. Declan O’Scanlon, R-13th District, the Republican budget officer. “We’re leading the way in showing Gov. Murphy and the Democrat legislative majorities how to give back billions to taxpayers while building a responsible surplus and paying down substantial additional debt. It’s no surprise that everyone else is suddenly rushing to find ways to ‘Give It Back’ as Senate Republicans have advocated for months.”

The nearly 20-page resolution lays out a framework of how to allocate $8 billion of previously unexpected revenues that are forecast for the current and upcoming fiscal years, along with $3 billion in leftover and unallocated federal COVID-19 money.

The Senate Republicans’ plan proposes $8 billion of increased tax relief for New Jersey’s families and businesses including:

• $4.5 billion through a pair of “Give It Back” tax rebates (Senate Bill 2243 and Senate Bill 2290) totaling $1,500 for millions of families;
• $1 billion of property tax relief by reversing Murphy’s proposed cuts to municipal aid and school aid, fully funding extraordinary special education, increasing the veterans property tax deduction, and more;
• $790 million in structural tax reductions, including raising the retiree income exclusion to $250,000, creating a deduction for charitable contributions, and eliminating the CBT (corporate business tax) surcharge early; and
• $2 billion to halt planned tax and toll increases by indexing state income tax brackets for inflation, replenishing the Unemployment Insurance Fund to prevent upcoming employer/employee payroll tax increases, stopping automatic toll increases on Jan. 1, and rescinding a major tax increase on the state’s largest health insurer and its customers.

“We have this unprecedented situation where families are struggling to pay their bills amid the highest inflation in a generation while the state is simultaneously bringing in record tax collections that are billions beyond expectations,” said Sen. Steven Oroho, R-24th District, the Senate Republican Leader. “Our ‘Give It Back’ rebates would help address this imbalance by returning $1,500 in direct tax relief to most New Jersey families immediately. … We’ve proposed a comprehensive and responsible plan that includes structural reforms to provide New Jerseyans with substantial tax and toll relief at a time when it’s desperately needed.”

The plan also calls for growing the budget surplus to more than $5 billion, focusing one-time revenues on funding nonrecurring needs, advancing longer-term reforms that make the economy stronger, and establishing additional restraints in recurring spending.

“We recognize that much of the windfall at our disposal is likely nonrecurring, which would make it irresponsible for anyone to propose substantial permanent spending increases that we won’t be able to support when the next recession comes, which may be sooner rather than later,” said Sen. Sam Thompson, R-12th District. “Our plan ensures that New Jersey is prepared for the next downturn by establishing a healthy $5 billion surplus that amounts to 10% of the budget, while making substantial investments in critical infrastructure, including to fix broken computer systems at unemployment and the MVC.

“Given the current financial challenges many families are facing due to high gas prices and inflation, we’ve proposed temporary school aid restorations to prevent property tax hikes in nearly 200 districts that could devastate household budgets. Further, we’ve proposed real reforms that would strengthen the state budget, lower costs, and provide additional relief to taxpayers in both good times and bad,” Thompson said.

The resolution would also impose legislative oversight on the unspent American Rescue Plan Act funds. Both parties in the Senate have demanded that the Murphy Administration not have unilateral authority to spend that money.

Murphy has proposed an ANCHOR property tax relief program in his budget plan, which Republicans have criticized for not helping New Jersey families and businesses enough. Following the latest projected windfalls, Murphy said he hopes to address property taxes in a historic way, a sentiment echoed by Assembly Speaker Craig Coughlin, D-19th District.

“I want to back the truck up on property tax relief and do something historic,” said Murphy on his News 12 New Jersey show, “Ask Gov Murphy.”

“Do something that’s never been done before in this state. Even, perhaps, go beyond that proposed ANCHOR program,” he said. “And this isn’t lower increases in property taxes, and we’ve had the four lowest in the history of the state. This is literally cutting substantially property taxes for 5 million New Jerseyans.”