NJBIA had been asking the Legislature to fix the FY 2021 budget that had been proposed by Gov. Phil Murphy. Unfortunately, the budget legislators approved Thursday did little to improve the plan and, in some ways, made it worse.
New Jersey employers will see increases in the tax rates of two major taxes, as well as increases in government spending unrelated to the health emergency and borrowing authority beyond what the Murphy administration requested.
Murphy, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin last week agreed to increase the state’s gross income tax rate on income between $1 million and $5 million from 8.97% to 10.75%. The budget will also be supported by extending the corporate business tax surcharge through 2023, effectively making New Jersey’s tax rate 11.5%, the highest in the nation. Legislators also increased an assessment on HMO premiums from 3% to 5%.
The income tax increase will fund a new tax rebate program for middle-income tax filers with dependents (married couples making less than $150,000 a year/singles making less than $75,000).
“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,” NJBIA President and CEO Michele Siekerka said in a statement Thursday. “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 budget and three tax increases were passed by the Senate and Assembly on Sept. 24 mostly along party lines, and Murphy has indicated he will sign the measures.
Find out how your legislators voted on these anti-business bills that NJBIA opposed with these roll call vote tallies: