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Republican gubernatorial nominee Jack Ciattarelli. (Photo: Kevin Sanders for the New Jersey Globe)

Ciattarelli joins chorus of GOP criticism over rosy revenue collections

Republicans want money used for tax cuts, school aid, among other things

By Nikita Biryukov, June 10 2021 2:05 pm

This article was updated with comment from Alyana Alfaro Post, Gov. Phil Murphy’s press secretary, at 3:32 p.m.

Republican Gubernatorial nominee Jack Ciattarelli joined the chorus of GOP critics taking aim at better-than-expected revenue collections Thursday, charging Gov. Phil Murphy’s administration has no idea how to use a $4 billion windfall announced Wednesday.

“As we have all come to expect, Murphy is scrambling without a firm plan to utilize a surplus created by his higher taxes and his unnecessary borrowing,” Ciattarelli said. “People and businesses have paid more than what Murphy and our state actually needed. Governor Murphy, give hardworking New Jersey taxpayers their money back. If you won’t, I will after November.”

In written testimony submitted Wednesday, State Treasurer Liz Muoio announced recent tax payments pushed the state’s revenues projections $4 billion above previous estimates for the current fiscal year, on top of another $1 billion increase expected for the fiscal year beginning July 1.

The collections are far from the doom-and-gloom projections budget officials issued near the start of the pandemic, when Treasury and the Office of Legislative Services warned that revenues could fall as much as $10 billion short of expectations.

The situation has now reversed. With a swell of federal aid money provided by the $1.9 trillion stimulus bill President Joe Biden signed into law earlier this year and rosier-than-expected tax revenues, the state is looking at $10 billion in budget reserves as Democratic lawmakers weigh a 2022 budget plan that includes a year-over-year spending increase of more than 10%.

It’s not clear yet how that money will be spent, though at least some — the administration says about $2.2 billion — is expected to go into New Jersey’s depleted rainy-day fund.

Republican Senators have proposed putting the new revenues toward tax cuts and spending initiatives, urging the front office to forestall scheduled increases to taxes paid into the Unemployment Trust Fund and defray school aid cuts imposed on some districts by changes to the school funding formula.

The administration signaled they might get similar policies could be on the horizon.

“Murphy’s budget will make investments in New Jersey and New Jerseyans and — unlike the budgets of Governor Christie, which prioritized tax cuts for millionaires and billionaires — will ensure we properly invest in our public education system, reduce the burden of health care costs, and provide additional tax cuts to New Jersey’s growing middle class,” Murphy Press Secretary Alyana Alfaro Post said. “We will continue to discuss proposals with Legislative Leadership to determine the best uses of state funds.”

The Unemployment Trust Fund was drained by millions of New Jersey workers who filed for unemployment amid the pandemic, and the state plans a set of phased increases to replenish it through July 2023.

Senate Republicans also called on the state use the windfall to overhaul computer systems at the Department of labor and Motor Vehicle Commission. That aging infrastructure caused hiccups during the pandemic, at one point forcing the state to issue a hiring call for programmers familiar with a language introduced in 1959.

They also want the administration to continue releasing small business aid grants and to pay down debt to offset $4 billion in noncallable bonds the state issued when it expected a massive revenue shortfall.

Federal guidance bars the use of stimulus funds to cut taxes or pay down debt.

“We believe that money should be returned directly to taxpayers, which has proven to be the most effective way to support our economic recovery,” State Sens. Steve Oroho (R-Franklin), Declan O’Scanlon (R-Little Silver), Sam Thompson (R-Old Bridge) and Michael Testa (R-Vineland) said in a joint statement.

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