Lawmakers in both chambers of the legislature approved the state’s nine-month budget and a handful of tax increases over Republican objections Thursday.
Gov. Phil Murphy is expected to sign the bills as early as tomorrow.
“Our budget delivers for our seniors and working-class families by fully funding the Senior Freeze and Homestead Rebate programs. Our schools and municipalities are receiving the same funding level as last year. Together, we made significant investments in hunger relief, anti-poverty and health programs to continue helping struggling families through this crisis,” Assembly Speaker Craig Coughlin (D-Woodbridge) said. “Working, middle class families will receive tangible relief in the form of a $500 rebate next summer. We once again fully fund our Transportation Trust Fund by infusing $2 billion into our transportation infrastructure. We earmarked $100 million for small business grants. This budget demonstrates our commitment to every New Jerseyan.”
The $32.7 billion budget bill passed alongside three major tax bills. Those measures bumped the income tax rate on annual income over $1 million from 8.97% to 10.75%, locked the corporate business tax surcharge at 2.5% until the end of 2023 and increased an annual assessment on health management organizations from 3% to 5%.
The millionaire’s tax, a measure sought by Murphy since before he took office, passed as part of a deal between top Democrats that will award roughly 800,000 filers with children with a tax rebate of up to $500.
“I would like to commend the Governor and Senate President Sweeney for their work on behalf of working, middle class New Jerseyans and thank them for their continued partnership,” Coughlin said. “I am very pleased that we have been able to reach this important agreement on a bill that will help middle class families, many of whom are struggling due to the COVID-19 pandemic.”
Republicans have attacked the rebate program as an election-year handout meant to boost Murphy and legislative Democrats at the polls in 2021. The rebates won’t go out until next summer, just months before the governor and every legislator in the state come up for re-election.
“For all of the Governor’s talk about rebates, there’s not a single penny in the budget proposed by Democrats to fund the checks that taxpayers have been promised in exchange for tax increases,” State Sen. Mike Testa (R-Vineland) said. “The taxes will be implemented this year, but the rebates won’t be. In fact, all taxpayers are getting is a hazy promise that the rebates might be funded in the next budget in the summer of 2021.”
The program is a one-shot, though Senate President Sweeney (D-West Deptford) and others have said they would like to make the program permanent.
The budget votes also drew some backlash from the state’s business community.
“The fiscal year 2021 budget is an irresponsible budget that will have long lasting effects on New Jersey’s continued inability to be regionally competitive and affordable,” New Jersey Business and Industry Association President Michele Siekerka said. “This budget will cost taxpayers for generations to come, as it exacerbates an already insurmountable debt load. And all this under the guise of providing tax relief.”
The only part of the budget left incomplete is the $4.5 billion in borrowing sought by Democrats.
That bonding will have to be approved by the Select Commission on Emergency COVID-19 Borrowing. Sweeney and Coughlin each pick two of the panel’s four members.
There’s little question the borrowing will be approved — it will be — the only question is when. Earlier this week, Sweeney said the commission would approve the bonding on Monday, though it’s possible that approval could come earlier.