- Gov. Murphy Unveils his FY 2021 Budget
Gov. Murphy Unveils his FY2021 Budget
Arguing that he has done what no one thought possible, Governor Murphy unveiled his FY 21 budget and claimed real progress against high property taxes, restoring New Jersey’s fiscal standing, growing the economy, and repositioning the State for success. He argued that New Jersey has succeeded not despite the Governor’s progressive values, but exactly because of those values.
Governor Murphy highlighted that he has built a $1.6 billion surplus and made the first back-to-back deposits into the rainy day fund in 20 years.
The Governor also heavily focused on property tax relief and that New Jersey has achieved the first- and fourth-lowest year-over-year increases in property taxes on record. Governor Murphy stated that his policies and large increases in school aid were bringing property taxes under control.
The Governor stated that school aid is direct property tax relief and school funding was increased $336 million bringing the total allocated school aid to $9 billion, the largest ever.
In other priorities:
- NJ Transit would receive a $157 million increase, bringing its total state subsidy to $825.6 million next year.
- New Jersey’s underfunded pension system for public employees would get $4.6 billion for FY 2021, the largest contribution in state history.
- The tuition-free community college program would be significantly expanded to include public four-year universities. The Garden State Guarantee would be open to students with household income below $65,000 a year. It’s also only available for the first two years of study.
The Governor reiterated his call for a millionaire’s tax and proposed a tax increase on cigarettes (from $2.70 to $4.35 to match NY) and an increase in gun registration fees. These are all tax increases and revenue raisers that have been proposed previously by the Governor and rejected by the Legislature.
The proposed millionaires tax would raise the tax rate from 8.97 percent to 10.75 on income between $1 million and $5 million. New Jerseyans with an income over $5 million already pay a 10.75 percent marginal tax rate under a previous budget deal. The state Treasury Department estimated this new tax could generate up to $494 million.
Overall, the budget would top $40 billion for the first time in State history and would be a 5% increase from last year. The FY 2021 plan proposes to reduce departmental spending by almost $400 million and to achieve close to $200 million in health care spending reductions through programmatic changes secured in cooperation with public employee unions.
Republican Assembly Minority Leader Jon Bramnick strongly attacked the speech and said it included “a lot of cheerleading but did not address the taxpayer issues of this State. Somehow he believes he’s addressing property tax relief but I don’t understand where or when he’s done that.”
Assembly Speaker Craig Coughlin stated that "The Governor's proposal is an encouraging first step and I commend his efforts to cut government costs, provide a healthy surplus and make a record payment into the pension system. The Assembly, I'm certain, will have additional ideas and priorities to discuss during the review process. We will continue to look for more government inefficiencies and cost savings, as we do each year. I remain cautious of increasing broad-based taxes.”
Senate President Sweeney earlier in the week indicated a willingness to consider a millionaire’s tax if the State made a $1 billion pension payment. He stated yesterday that he did not see a need for other taxes.
NorthJersey.com Columnist Charlie Stile provides additional analysis on the Governor's budget address.