Business groups are hammering Gov. Phil Murphy’s proposed budget over its more than $1 billion in tax increases, around two-thirds of which would hit the wealthy and corporations.

In an online news conference, the organizations were also critical of the budget’s proposed $4 billion in borrowing to support operating expenses. They say the state should instead consider a smaller surplus than the $2.2 billion Murphy seeks and keeping the payment into pension funds flat at current levels.

But it’s the budget proposal’s eight tax hikes that has them particularly concerned, as around two-thirds would be raised from income over $1 million and corporations. Murphy also seeks to add $1.60 to the tax on a pack of cigarettes, among other changes.

New Jersey had the nation’s fourth-highest unemployment rate in July, 13.8%, but New Jersey Chamber of Commerce president and chief executive officer Tom Bracken of the Chamber of Commerce said the state has no plan to begin a revival.

“We need an aggressive attack on our economic crisis similar to the one employed to control our medical crisis if we hope to avoid taking our economic devastation to new depths,” Bracken said.

“The needs of our business community have been and continue to be ignored and dismissed and the proposed budget is the poster child for that,” he said. “Our economy is in horrible shape, but the administration seems to be in denial of that, as evidenced by the budget.”

Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association, said the state “crushed the COVID-19 curve” but now risks crushing its economy.

“Gov. Murphy’s budget does not deal with the reality of where New Jersey’s economy is today,” Siekerka said. “What is the reality? Our economy is in the tank, is where the reality is.”

The state didn’t actually “crush the curve” – a phrase some people have used as a more ambitious sequel to “flatten the curve,” in which infections would be driven down nearly to zero before stay-at-home orders would be lifted.

The state’s current 7-day rolling average of infections is 374, up 7% from a week ago. The average reached its lowest point of the pandemic on July 21, when it was 271. However, it is far below its April 6 peak of 3,764.

The rate of transmission as of Sunday was estimated at 1.1, which means every infected person is believed to be spreading the virus to 1.1 other people. The rate has risen 11 days in a row and is at the highest point since Aug. 5.

Hospitalizations remain low, and Murphy has loosened restrictions on which businesses must remain closed. Gyms opened last Tuesday, and indoor dining and indoor attractions such as movie theaters were allowed to reopen last Friday for the first time since mid-March, though at 25% capacity.

Industry groups say it’s a first step but that more is needed soon.

Marilou Halverson, president and chief executive officer of the New Jersey Restaurant & Hospitality Association, said the first weekend of indoor dining was good – for places with outdoor seating, as well. Capacity has to get to 50% for small places in cities to reopen, she said.

“The problem is for the small restaurants in cities that don’t have outdoor dining, they just didn’t open because if their capacity is 35, 50, it just doesn’t make sense to open the doors,” Halverson said.

Halverson said it’s important that Murphy not pull back on indoor dining if the coronavirus rate of transmission increases in a few weeks because it wouldn’t be clear which industry is the culprit. She said she hopes the contract tracing is transparent.

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Al Licata, president and executive director of the Bernards Township Regional Chamber of Commerce, which covers parts of Morris and Somerset counties, said many restaurants didn’t open because of the limited advance notice, the capacity being too small, worry that Gov. Phil Murphy would again reverse course and concern about repaying federal PPP loans.

“And it was just sad,” Licata said. “Instead of celebrating the holiday weekend, I’ve got business owners with papers across desks just scratching their head wondering how they’re going to make the payroll for the week. On a holiday weekend, Labor Day weekend, it was quite astounding.”

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