Neither of the state Legislature’s top elected officials – both Democrats – are dismissing any of the proposed tax increases from Gov. Phil Murphy’s revised fiscal year 2021 budget—be it levies on cigarettes, a millionaire’s tax, or plans to extend the current tax on businesses.
The governor laid out his $32.4 billion spending plan, which includes $860 million in new taxes and fees, Tuesday morning at SHI Stadium at Rutgers University in Piscataway.
That spending proposal would cover expenses between Oct. 1, 2020, and June 30, 2021, as the COVID-19 pandemic prompts the closure of 1.5 million New Jersey businesses, triggering steep drops in consumer spending, record-high unemployment, and evaporating billions of dollars in revenue from the sales, income and corporate business taxes.
Combined with a $7.6 billion “bare bones” stopgap spending plan to cover expenses in the three-month extension of the current budget, the total 12 months of expenses comes in at just over $40 billion.
Senate President Stephen Sweeney delivers remarks at SHI Stadium at Rutgers University in Piscataway for Gov. Phil Murphy’s revised Fiscal Year 2021 budget address. – DANIEL J. MUNOZ
“At this point, to say anything’s off the table … where we’re at in this world right now would be very irresponsible,” Senate President Stephen Sweeney, D-3rd District, told reporters prior to the budget address. “I’m not excited about taxes, but you can’t pull anything out right now.”
Sweeney’s counterpart in the lower house, Assembly Speaker Craig Coughlin, D-19th District, agreed with the Senate president.
“Nothing’s off the table yet,” Coughlin said in an interview after the budget address. “We’re going to have to have ideas as well. The Legislature has it, it’s now our budget.”
The budget has to be signed by Sept. 30, but Sweeney reiterated that fast-paced and “condensed” budget negotiations would likely run their course in a matter of weeks.
“For me to say ‘this is off and that’s on’, I can’t,” he added.
Murphy’s plan calls for $390 million from a millionaire’s tax by increasing the income tax rate from 8.97 percent to 10.75 percent for any dollar earned above $1 million.
Murphy pursues ‘revenue raisers’ in 2021 budget:
Millionaire’s tax, cigarette fees, CBT and more
“Building a stronger New Jersey requires us to ask those who, in some cases, continued to prosper as this pandemic raged around us – and most certainly were hurt less – to do more so we can strengthen the middle class families who are the backbone of our state,” Murphy said in his address.
A proposal to increase the taxes on each pack of cigarettes purchased – from $2.70 to $4.35 a pack – would bring in $143 million. Sweeney previously dismissed the proposal when Murphy unveiled it in February, and at the time Coughlin said that he was “cautious of increasing broad-based taxes.”
The revised spending plan from the governor proposes making the 2.5 percent corporate business surtax permanent. On top of the existing 9 percent rate for New Jersey’s highest-earning businesses, that would bring in another $210 million.
Both leaders of the state Legislature, from left Coughlin and Sweeney, agreed current circumstances leave everything on the table for the state’s Fiscal Year 2021 spending plan. – DANIEL J. MUNOZ
Sweeney said on Tuesday that he was largely supportive of that, and had been pushing for it last year in place of the millionaire’s tax.
“If you remember, these are the corporations that had their taxes reduced” by the federal government. “These are the ones that actually had the real windfall.”
Republicans panned the tax increases altogether, and Assembly Republican Leader Jon Bramnick, R-21st District, told reporters after the budget address that the governor “has gone so far left, in terms of his policies, that he doesn’t want anything to do with common sense.”
“I’m hoping that Sen. Sweeney and Assemblyman Coughlin bring some common sense to the table,” Bramnick said.
