More taxes, more borrowing: 2021 budget is now official

Gov. Phil Murphy proposes his fiscal 2021 budget earlier this year. (File photo)

Gov. Phil Murphy signed the state budget Tuesday — on time and without much of a fight. Its impact may be felt for years.

For Murphy, state Democrats and progressives, the $32.7 billion budget represents the best way for the state to move forward during a COVID-19 pandemic that has caused a health state of emergency and unprecedented financial hardship for many.

It comes with an expansion of the millionaire’s tax, the decision to borrow $4.5 billion and $500 rebates for approximately 800,000 residents, they note.

“As we continue to grapple with the effects of the pandemic, building a stronger New Jersey requires us to continue to bolster the middle-class families who are the backbone of our state,” Murphy said in a statement released shortly after the signing.

“This revised budget not only recognizes the realities of the pandemic, offering much-needed tax fairness, including tax relief to the middle class, but also maintains our core principles so that we can emerge from this crisis stronger, fairer and more resilient.”

The budget, which was delayed because of the pandemic, addresses spending for only the nine-month period beginning Thursday (Oct. 1) through June 30, 2021.

Assembly Speaker Craig Coughlin (D-Woodbridge), who played a key role in the negotiations, applauded the final result.

“The road to recovery has and continues to be long and strenuous,” he said. “Given these challenges, the Legislature recommitted itself to our core responsibilities of protecting families and the most vulnerable, stabilizing local governments and stimulating our economy.

“To do so, we could not solely tax or cut our way back to prosperity. Together with the governor and the Senate, we put together a balanced plan that cut nearly a billion (dollars) in spending, asked the wealthiest among us to share in the sacrifice and made the difficult decision to borrow.”

Sheila Reynertson. (File photo)

Sheila Reynertson, a senior policy analyst at New Jersey Policy Perspective, also supported the signing.

“Today is a historic moment for New Jersey, as the state tax code is getting a lot fairer — and for good reason,” she said. “Income inequality is at an all-time high, and, for far too long, lawmakers failed to address this in a meaningful way. Today, that changes.

“The millionaire’s tax will help New Jersey maintain investments in crucial assets like education while responding to the COVID-19 health crisis without further worsening economic and racial inequality. We truly are setting an example for the nation on how to build an economy that works for all of us, not just a chosen few.”

Michele Siekerka. (File photo)

Michele Siekerka, the head of the New Jersey Business & Industry Association, disagreed — as did many business groups. Siekerka said it’s time to make meaningful change to how the state does business.

“Now that Gov. Murphy has put ink to the page of a budget that will do great damage to New Jersey businesses and taxpayers, we hope that he and our policymakers will work on writing a new script that includes real, comprehensive reforms and expands the capacity for our businesses to operate,” she said.

“With $215 billion in debt, a crushing business climate and a continued appetite to tax and spend, New Jersey simply cannot continue along this path.

“We are encouraged by talk of real reforms as we turn the page from this budget. But it can no longer be about talk, and actions must truly be meaningful. We look forward to working with our policymakers to make it happen.”