How much more will it cost to stay in NJ? (Analysis)
The next three months may determine how much more it will cost you to live in New Jersey.
Gov. Phil Murphy continues to push for higher taxes and, at least for now, democratic leaders of the Senate and Assembly continue to resist those calls.
On Monday, State Treasurer Elizabeth Muoio warned members of the Assembly Budget Committee more than $800 million in revenues in the current budget will not recur in the 2020 spending plan. These so-called one-shot revenues include monies from a tax amnesty program and changes to the federal tax code.
In all, Muoio said, 2 percent of the 2019 budget, or about $812 million, will need to be made up in other ways. Murphy has proposed a $38.6 billion dollar budget with a wide slate of tax hikes on everything from guns and ammo, to millionaires, to corporations that don’t provide health insurance. Murphy left the door open to a hike in New Jersey Transit fares, if he doesn’t get the tax hikes he wants.
Muoio’s testimony was designed to bolster Murphy’s argument for more taxes.
Assembly Speaker Craig Coughlin and Senate President Steve Sweeney have both said they do not support Murphy’s tax hikes. During an appearance on New Jersey 101.5, Sweeney did not voice support for a single one of Murphy’s revenue raisers, including the same millionaires’ tax hike he supported when Chris Christie was governor.
In all, Murphy has proposed over half a billion dollars in new or increased taxes to fund a progressive agenda that includes legal aid for unauthorized immigrants and billions more in school aid and pension contributions.
Lawmakers also remain skeptical about Murphy’s revenue projections, after he whiffed badly on his 2019 targets. Income and sales taxes brought in far less than expected. Only business taxes saw an increase, and that was due to a tax increase. In Monday testimony, Muoio and the non-partisan Office of Legislative Services were about $109 million apart on their revenue forecast for 2019, but both agreed collections would fall short of what was projected in the budget.
Lawmakers are just beginning the process of examining Gov. Murphy’s spending plan, but there is little common ground in terms of making up for lost revenue. The deadline for adopting a balanced budget is July 1. Despite Sweeney and Coughlin publicly rejecting tax hikes, privately there is increasing concern about how to generate enough revenue to avoid significant budget cuts that could have unintended consequences to taxpayers on a local level.
Information from the Associated Press was used in this report.