Gov. Phil Murphy called for increased income taxes on anyone making $1 million a year or more in his 2020 budget address Tuesday, after announcing more than $1 billion in savings in voluntary public worker health care concessions and departmental spending.
He presented a total budget of $38.6 billion, which would increase spending by about $1 billion. Investments would increase in NJ Transit, education and a record public-worker pension payment of $3.8 billion.
“Let’s work together to apply the millionaire’s tax to every millionaire. By doing so, we can do more to relieve the burden on middle-class taxpayers and senior citizens who are taking it on the chin from the Trump administration’s tax scam,” Murphy said to a standing ovation from many in his administration and stony silence from Republicans.
The current spending plan expires July 1.
After the speech, Democrat legislators held a news conference in which they said they appreciate the savings Murphy announced but believe more spending cuts are possible and do not support income-tax increases.
“This is a positive first step,” said Senate President Steve Sweeney about $800 million in negotiated health care savings from the public workers union Communications Workers of America. “The governor and the CWA have demonstrated there is a lot more savings to be had.”
CWA New Jersey represents more than 30,000 state workers, 15,000 county and municipal workers, and thousands of workers in the telecommunications and direct care industries, according to its website.
An additional $400 million in CWA health care savings will be shared by county and municipal governments, Democrats said.
“I heard some good things — school aid is increased ... but I’m not too excited about a new tax,” said Assemblyman Vince Mazzeo, D-Atlantic. “From the legislative side, we have to look for different ways than a new tax. We have to get more efficient in government and cut more.”
Mazzeo was also happy to hear Murphy say he intends to work with legislative leaders and the Legislature as a whole on the budget.
Murphy asked for the millionaire’s tax in last year’s budget address but didn’t get it. Instead, he and other Democrats negotiated a tax increase on those making $5 million a year and more.
“Let’s be absolutely clear — this is not a tax that will be paid by anyone in the middle class,” said Murphy. “But it is revenue that is necessary to strengthen and expand the middle class.”
The governor says his proposed hike would generate about $450 million and would apply to about 18,000 residents with incomes from $1 million to $5 million.
He’s also seeking what he calls a “corporate responsibility fee” of $150 per worker for large employers with more than 50 employees who use Medicaid for health care. He says the fee would incentivize employers to provide benefits.
State Sen. Chris Brown, R-Atlantic, said New Jerseyans rate their quality of life at an all-time low and are moving out of state in record numbers “because they are already overtaxed, overfee’d and over-tolled.”
He opposes another tax increase, which he predicted will drive more families out of state, “eliminating our middle class, leaving only the really rich and the really poor.” He called for “property-tax relief to make New Jersey more affordable so our middle-class families can raise their kids and retire here some day.”
“New Jersey spends too much, and we tax too much,” said Assemblyman Jon Bramnick, R-Morris, Somerset, Union, in a Republican news conference after the speech. “I didn’t hear anything about that.”
Republicans also said the governor’s revenue forecast was too rosy for 2019, and the state was about $700 million behind in revenues as of January. They called for a new way to forecast revenues, calling current methods “guesswork.”
Murphy also reiterated a call for legalizing recreational marijuana.
“Most importantly, this is the right step for eliminating decades-old and persistent racial and social inequities,” said Murphy, who said he will only sign a bill that includes expungement of records of those put through the criminal justice system for prior marijuana offenses.
“It is also our chance to create an entirely new state-based industry with the potential to create thousands of good-paying jobs, expand opportunities for minority business owners and jump-start billions of dollars in new economic activity,” said Murphy.
The Associated Press contributed to this report.