A progressive think tank renewed its call for a slew of tax increases in the wake of the COVID-19 crisis upending New Jersey’s economy.
NJ Policy Perspective called on lawmakers and Gov. Phil Murphy to create new tax brackets for those making between $250,000 and reversing changes made to the estate and sales taxes under former Gov. Chris Christie.
“New Jersey does not have the resources to weather an economic downturn right now,” NJPP senior policy analyst Sheila Reynertson said. “That is a direct result of tax cuts given to wealthy families and big corporations that have drained New Jersey’s budget coffers. If state lawmakers want to avoid brutal cuts to public services and programs that families rely on, especially during times of crisis, they must raise new revenue.”
The proposals in the NJPP report are little different from ones a progressive coalition that includes the think tank called for in February.
Budget negotiations are in disarray amid the progression of an international pandemic that has left almost 200 dead and more than 16,000 sickened in New jersey.
State Treasurer Liz Muoio has frozen more than $900 million from the current budget to prepare for an expected decline in revenues in the year’s closing quarter, and she has said the budget Murphy announced in February will need significant revisions before moving forward.
Few details about that new budget are in place. That’s not surprising given the lack of clarity on the effect the COVID-19 crisis has had on the state’s economy.
Murphy has requested $20 billion in federal aid, but so far, the state has received just a fraction of that money.
New jersey got $3.4 billion in direct aid from a $2 trillion bailout package Congress passed last week.
It’s not clear whether most of those funds can be used for measures unrelated to the state’s public health response.
Still, the progressive organization argued that state lawmakers shouldn’t be looking to cut spending on many of Murphy’s hallmark programs amid the downturn.
“The COVID-19 pandemic may have altered the state’s finances, but it shouldn’t change the state’s priorities,” Reynertson said. “State lawmakers must continue investing in New Jersey families in this extraordinary time of need. We can do that, regardless of how much federal aid New Jersey receives, by embracing new sources of revenue that make the tax code fairer and the state’s finances stronger.”