The Assembly and Senate today gave final legislative approval of a nine-month budget for FY 2021 along with about $700 million in tax increases, $4.5 billion in borrowing for operating expenses, and increased spending unrelated to the pandemic.
Gov. Phil Murphy has indicated that he will sign the $32.7 billion spending plan for the shortened fiscal year, which will begin Oct. 1. The plan passed in party-line votes—25-14 in the Senate and 51-27 in the Assembly.
NJBIA criticized the budget in a statement issued shortly after passage.
“A budget that settles on needless borrowing, excessive spending and completely avoidable tax increases is yet another major hit to New Jersey’s business community, which again is expected to pick up the costs of the bill,” said NJBIA President and CEO Michele Siekerka. Only this time, businesses are scratching to hang on in a COVID-19 impacted economy. Enough is enough.”
The budget also relies on tax increases passed separately, including:
- an increase of income tax rates from 8.97% to 10.75% on income between $1 million ad $5 million bill (A-10/S-2949);
- an extension of the Corporation Business Tax surcharge of 2.5% until the end of 2023; and
- an increase assessment on HMO plans assessment from 3% to 5% net written premiums (A-4722/A-2935).
The additional taxes will pay for a new tax rebate program providing up to $500 to middle-income taxpayers with dependents, lower income families and single parents, a higher budget surplus and a number of what are called “Christmas tree” spending items that pay for local projects at the request of individual legislators.