With budget signed, Murphy finally has his millionaire’s tax

Gov. Phil Murphy signed into law a 9-month budget that includes a tax on the state’s high earners and $4.5 billion in borrowing meant to shore up the state’s finances amid a COVID-19-fueled fiscal tumble Tuesday.

“As we have all said many times before, a budget is a reflection of the values of our state, and looking out as best I can see, I see these values reflected in your faces. And I hear them in your voices, and I am proud of the budget we are enacting today,” Murphy said.

The $32.7 billion 9-month budget also locks in the corporate business tax surcharge at 2.5% through 2023 and increases an annual fee leveled on Health Management Organizations from 3% to 5%.

But the budget’s most controversial measure — opposed by the Republicans and the state’s business communities and, until this year, Democratic leaders in the legislature — was Murphy’s long sought-after millionaire’s tax.

“You can say whatever you want to say. The pandemic hit, the numbers got bad and we made a decision to work together for the people of the state of new jersey,” Senate President Steve Sweeney (D-West Deptford) said. “Yes, we made enemies. I really don’t care. We did the right thing.”

In exchange for movement on Murphy’s signature campaign promise, up to 800,000 New Jersey taxpayers with at least one child will get tax rebates of up to $500 next summer, just months before Murphy and every one of the state’s legislators come up for re-election.

Republicans have criticized the administration’s plan for the budget since the governor made his revised budget address last month, with much of the focus falling on the $4.5 million in borrowing found in the final bill.

They’ve also claimed the tax increases would hamstring the state’s economy and drive residents out of the state.

“With this budget, Governor Murphy might as well be signing a letter addressed to every New Jersey taxpayer that reads ‘move to FL or PA. I don’t care,’” Republican State Chairman Doug Steinhardt said. “This $32.7 billion budget is the most callous and crippling in New Jersey history. In the middle of an economic crunch made worse by his decisions, Phil Murphy’s lack of understanding for struggling New Jersey businesses and families was never more evident.”

But with the budget now signed and a tamer-than-usual budget season coming to a close, Democrats are taking something of a victory lap.

“As the senate president said, this is a good budget. As the governor pointed out, it’s a fair budget, and it’s a budget that I think poses New Jersey to be in a place, when the recovery comes—and it will—to take advantage of that, to not be too far down in order to come roaring back,” Assembly Speaker Craig Coughlin said.