Gov. Phil Murphy said he is proud of the budget his team has agreed upon with the state Legislature, saying it will go a long way to help families who are in crisis because of the COVID-19 pandemic.
“The budget lives up to our most important objective: preparing our state for a stronger, fairer and more resilient future,” he said.
The proposed budget will cover an abbreviated nine-month fiscal year. The current version has a $32.7 billion spending plan that includes higher tax rates for millionaires, corporations and certain health insurers.
Under the new budget, the millionaire’s tax will increase the rate that families making over $1 million a year pay, to 10.75%. The corporate business tax will remain at 11.50% as the surcharge — which was scheduled to go down — will be kept at 2.5%, which Murphy estimates will bring $210 million in revenue this year. The HMO assessment on net written premiums also has increased, which the governor estimates with bring in an extra $103 million.
The budget, Murphy said, will help the struggling families across the state.
“The budget safeguards key programs that our families and residents are relying upon to see themselves through the pandemic,” he said. “It will further our ongoing effort to restore fiscal responsibility and accountability, live up to our obligations and ensure the strong surplus we need for the unknowns ahead.”
Originally, the governor proposed a plan that included a $2.2 billion surplus to help safeguard the state in case of a second wave of COVID-19. However, after much debate, the most recent proposal includes a higher surplus of $2.5 billion.
Other provisions included in the proposal are a borrowing plan of $4.5 billion and a $4.7 billion allotment for public worker pension payment. The final version of the proposal was approved by the Senate Budget and Appropriations Committee by a vote of 8-4.
Many of the provisions included in Murphy’s original plan were not included in the final version that is being voted upon Thursday. One of these provisions was the Baby Bonds program that would make a $1,000 investment on behalf of the estimated 72,000 children that will be born in the state next year.
Other items missing included the governor’s proposed tax hike on boats and yachts, cigarettes, limousine services, and firearms and ammunition.
Murphy’s not worried, though, saying that this is just how the system works.
“Yes, not everything I proposed, or the Legislature wanted, is included in the final budget,” he said. “I will keep advocating for the programs and causes I believe in, and I know the Legislature will do likewise. That’s the way the budget process works.”
After being voted upon Thursday, the proposal will be sent to Murphy for final approval. The governor has line-item veto power to reject individual provisions of the budget he disagrees with. Once signed, the new budget will cover the fiscal year that begins Oct. 1.