TRENTON — The state Legislature passed a $38.75 billion state budget Thursday, which differs significantly from Gov. Phil Murphy’s proposed budget — and without the governor’s millionaire’s tax.
The question now is whether Murphy will sign it, and how much he will use the line-item veto he threatened to use in a letter to legislators Wednesday.
Democrat Murphy believes the legislators — dominated by his own party — did not adequately fund the budget, in part because they didn’t include an increase on income taxes for those making more than $1 million.
Murphy wants the top marginal rate to go from 8.97% to 10.75%. He had estimated the hike would bring in nearly a half-billion dollars, which he said he’d use in part to finance a $125 tax credit to defray residents’ sky-high property taxes. He said the funding would also help stabilize the budget in future years so the state could meet its pension and education funding requirements.
Gov. Phil Murphy on Wednesday threatened to use line-item vetoes to cut spending in the Legi…
Assemblyman Vince Mazzeo, D-Atlantic, said there is no need to impose a greater burden on taxpayers in a year with revenues strong enough to fund the state’s goals.
“This year’s ‘April Surprise’ was a good one; state revenues exceeded expectations by millions,” Mazzeo said in a statement. “That’s why I’m pleased to support this budget, which allows us to fund our priorities and provide property-tax relief, without the addition of a millionaire’s tax.”
The Legislature’s 2020 budget includes $100 million in new legislative spending priorities and $75 million more for NJ Transit, compared with an additional $25 million for NJ Transit in Murphy’s $38.6 billion budget.
State Senate President Steve Sweeney said at an editorial board meeting Wednesday at The Press of Atlantic City that NJ Transit is $135 million in debt, and this year’s increased funding should only be a down payment on future increases.
He also explained why he is so adamantly opposed to the millionaire’s tax.
“Until the administration recognizes and is willing to deal with the fiscal crisis the state’s in, we are not raising taxes,” Sweeney said. “We are $130 billion — not million dollars — in the hole now between retiree health care and pensions. It is the governor’s job to work with us to fix that, and the lack of acknowledgement is troubling.”
The state constitution requires a balanced budget be in effect by July 1.
“We are pleased that the budget advanced by the Legislature today forgoes tax increases when New Jersey taxpayers have clearly had enough,” said New Jersey Business & Industry Association President and CEO Michele N. Siekerka.
Siekerka said the wealthiest 1.5% of New Jersey residents already pay 40% of the state’s annual gross income-tax revenue.
“We should not be giving those residents any more reason to consider leaving our great state, particularly when we have yet to fix our structural deficiencies that have contributed to the state’s long-term debt obligations increasing 382% from 2007-17,” she said.
Gov. Phil Murphy and legislative leaders have until the end of this month to agree on the ne…
But Kevin Brown, vice president and New Jersey state director of the Service Employees International Union, said his members are disappointed the rich won’t be asked to contribute more to help the state.
“As a union that represents thousands of security officers, doorpersons, cleaners, airport workers and school cafeteria workers in New Jersey, we support important measures like the millionaire’s tax because we need a permanent solution to the state budget crisis, and the burden should not be put on working families,” Brown said in a statement.
Assembly Minority Leader John Bramnick, R-Somerset, Morris, Union, said the state is on a “crash course with bankruptcy” because of high debt and underfunded health care and pension systems for state workers.
He said the budget “does not address any of the serious structural problems that cause serious issues with the taxpayers of New Jersey.”
Mazzeo said Atlantic County residents will benefit from many aspects of the budget.
“So much of this budget will have a direct impact on Atlantic County residents, from $75 million in increased funding for NJ Transit — of which we are prepared to fight for our fair share for the Atlantic City Rail Line — to almost $175 million towards property-tax relief,” Mazzeo said.
The Associated Press contributed to this report.