Gov. Murphy pitches higher taxes, money for schools in budget address

Remigio Civitarese
Marzo 14, 2018

Gov. Phil Murphy unveiled an ambitious progressive agenda Tuesday when he pulled back the curtain on his $37.4 billion state budget proposal.

"We need to spend more resources in recovery and less on wasteful television ads", Armato said. "People in New Jersey are taxed, tolled, feed and charged to death", Van Drew said.

The revenue raisers for the fiscal 2019 budget, which begins July 1, will fund initiatives Murphy needs to define his new governorship and leave the state with a $743 million surplus, instead of a $161 million deficit.

Murphy's proposal to increase the sales tax to 7% came after Nuveen Asset Management released a report saying that a new 6.625% reduced sales tax that took effect on January 1 "endangers" annual pension funding gains. New taxes are being proposed on rideshares like Uber and Lyft, home sharing sites like Airbnb, legal marijuana sales and investment profits.

Governor Murphy campaigned heavily on a pledge to legalize marijuana and today's address makes clear he continues to push forward on his promise.

Raise marginal income tax rate to 10.75 percent for those making more than $1 million.

Murphy's proposes contributing $3.2 billion toward the state's pension system, which now receives funding from New Jersey Lottery revenues under legislation signed by Christie past year.

Assemblyman Vince Mazzeo, D-Atlantic, said he looks forward to working with the Governor's Office to make sure the finalized budget is fiscally responsible in a way that does not raise the cost of living for middle-class families and small businesses in Atlantic County.

But if that happens, it'll get taxed: a 25 percent excise tax, plus the sales tax.

He's also calling for raising how much state residents can deduct in local taxes on income tax returns from $10,000 to $15,000, a reaction to the new limitation on deductions under the 2017 federal tax law.

In 2016, Democrats struck a deal with Christie to cut the sales tax in exchange for an increase in the state's tax on gasoline to fund an exhausted Transportation Trust Fund. Taxing carried interest, according to the budget, will generate $100 million, according to the administration. Democratic Senate President Steve Sweeney has said the increase would be approved only as a "last resort". Beyond transit, Murphy announced his budget will support education by expanding pre-K programs and pursuing tuition-free community college by 2021.

The direct subsidy to NJ Transit would increase by $242 million, to $383 million. The pension funding, which is up 14% from the current 2018 budget, would still put New Jersey only at a 60% actuarially funded level and on pace to be fully funded in 2023.

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