Committees in both chambers of the legislature on Tuesday approved a series of budget bills expected to pass before both full chambers Thursday.
“We have a budget that makes the best use of available resources to address the most important needs of New Jersey at a time of economic distress and uncertainty,” Senate Budget Committee Chairman Paul Sarlo (D-Woodridge) said. “It is not a budget we would want to adopt, but it is a budget that is needed to get us through the COVID-created crisis.”
The measures approved Tuesday include bills creating a new tax bracket for filers making more than $1 million annually, locking in the corporate business tax surcharge at 2.5% until the end of 2023 and raising an annual assessment levied Health Management Organizations from 3% to 5%.
Those measures will come before the full Assembly and Senate on Thursday, as will the budget. They’re expected to pass without little issue, meaning Gov. Phil Murphy will likely be able to sign the nine-month budget into law as early as Friday.
The budget advanced Tuesday is mostly similar to the one Gov. Phil Murphy announced in his revised budget address last month.
The new plan calls for $4.5 billion in borrowing, or a half million more than Murphy called for in his budget, mainly to head off the possibility of another COVID-19-fueled downturn.
“The overall budget does borrow a little bit more,” Sarlo said during a press gaggle Tuesday. “It also puts a little bit more into surplus as well, so I think you need to look at this as the state is well-positioned if there’s a second wave or if the economy doesn’t rebound as fast as we all would like to see it.”
Total spending for the nine-month budget comes in about $350 million higher than the $32.4 billion budget the governor introduced last month, and it does so while ditching a number of small tax hikes Murphy sought, including increases to levies on cigarettes, boat sales and limousine services, among others.
The budget also cuts the governor’s planned pension payment by $200 million, dropping it down to roughly $4.7 billion. Though Murphy in August suggested the pension payment was non-negotiable, Senate President Steve Sweeney said the front office had agreed to the cut.
“What you see has been agreed upon by all three branches, all three houses,” Sweeney said, adding later: “I absolutely intend, as soon as this budget is done, to start working and moving on reforms. This is the beginning, not the end. The reforms have to start happening.”
Treasury submitted its borrowing proposal earlier Tuesday, and the Emergency Borrowing Commission has until Monday to approve the bonding, as it almost certainly will.