Governor’s budget borrows $4B, raises $1M in NJ taxes and fees – NJTV News

109636109636109636Governor's budget borrows $4B, raises $1M in taxes, feesFacing a pandemic-sized budget hole, Gov. Phil Murphy unveiled a spending plan for the rest of FY2021 that would borrow $4 billion and raise taxes on millionaires, cigarettes, yachts and firearms. Business groups called it "irresponsible" and Republican lawmakers condemned it as a burden New Jersey taxpayers simply can't afford.2020-08-25 08:33 amdisabled8g5HzP8jXZAtrue

Gov. Phil Murphy unveiled his budget plan on a sweltering Rutgers football field facing socially-distanced lawmakers, officials and news media. He proposed a COVID-19 driven, $32.4 billion budget proposal for the rest of the fiscal year. It would borrow $4 billion and raise more than $1 billion in fees and taxes on millionaires, cigarettes, yachts and gun permits.

The governor explained the pandemic lockdowns crushed tax revenues, confronting the state with an estimated $5.6 billion budget deficit.

Beside setting off an unprecedented public health crisis, this pandemic also unleashed an economic crisis, Murphy said. 1.4 million have filed for unemployment, but we cannot send the false hope things are going to simply snap back to the way they were before.

Murphys proposal finally completes his original fiscal year spending plan that was put on hold when the pandemic surge sent the state into lockdown in the spring. It restores the Senior Freeze and Homestead Rebate programs that benefit senior, disabled, and low-income homeowners and leaves school funding and municipal aid flat.

It also makes a massive $4.9 billion payment into state public worker pension system. And, it borrows an idea from Sen. Cory Booker the creation of Baby Bonds, a $1,000 deposit for each qualifying newborn that they can use at age 18.

And as this child grows, so too will the value of this bond to help pay for things like college, to help ultimately to make a down payment on a home or start a small business, Murphy said.

The governor again called for more federal aid from the president and Senate Majority Leader McConnell an unlikely event. So Murphys pushing to borrow $4 billion, but doesnt plan to spend it all. Hed set aside half of the money for a COVID-19 surge.

This budget envisions a closing surplus of more than $2.2 billion, a much needed cushion against revenue shocks from a second wave, Murphy said.

The budget does require state departments to cut $1.25 billion in spending. This is Murphys third attempt to generate $390 million by raising the so-called millionaires tax from 8.97% to 10.75% on gross income between $1 million and $5 million. Thats the rate already paid on income over $5 million.

I would urge those who would pay this tax to see it this way: were asking you to sacrifice pennies on your top dollar to ensure every New Jerseyan has the same opportunity to succeed that you did, Murphy said.

Democrats in the Legislature have blocked Murphys previous efforts to hike taxes on New Jerseys wealthiest taxpayers.

Senate President Steve Sweeney expects tax revenues might be better than the governor predicted, but said nothings off the table.

Im not excited about taxes, period, but you cant rule anything out right now. That would be irresponsible. Weve never been in a place like this, so weve got to look at everything, Sweeney said.

Items expected to prompt protests include the proposal to let a temporary 2.5% Corporate Business Tax surcharge become permanent. Its a move the business community calls irresponsible. Plans to raise taxes and fees on firearms will draw fire from Second Amendment advocates.

Republican lawmakers panned the tax hikes and borrowing.

This was a political speech, 100% political, and he forgot one interest group: the taxpayers of the state of New Jersey, said Assembly Minority Leader Jon Bramnick. This is a governor who is totally out of touch with the working people who are paying the taxes.

Eight new taxes during the worst recession. New Jersey residents dont have the luxury of going out and borrowing $9 billion, even if theyre the ones whore going to foot the bill so its very disappointing, said Assemblyman Hal Wirths.

A special commission must approve the borrowing plan before it even gets to lawmakers for debate. Its uncertain how much input the public is going to get. This budgets on a fast track with a tight Oct. 1 deadline.