Murphy is considering a new round of tax hikes for New Jersey, report

💲 Talk of tax hikes has been revived in Trenton

💲 Lawmakers and Gov. Murphy are reportedly considering multiple options

💲 Here's what is being discussed and how it impacts you

Despite Gov. Phil Murphy's pledge to "make life more affordable for all families," there are signs tax payers are going to be asked to pay more in the new state budget.

Murphy will deliver his spending plan to lawmakers in about a month, and NJ.com is reporting it could include multiple tax hikes.

New Jersey is facing financial difficulties as revenues shrink in an uncertain economy and federal funding connected to the pandemic goes away.

Under Murphy, state spending has grown to record levels and many budget experts says that it is unsustainable without more revenue raisers.

💲 What could be increased?

The sales tax is the most obvious starting point for budget negotiators.

Murphy has targeted an increase in the sales tax before.

In 2018, Murphy wanted to raise the sales tax back to 7% after it was cut to 6.625% by former Gov. Chris Christie in 2016.

Democratic leaders in the legislature fought with Murphy over the increase, and it was ultimately left where it was.

Murphy is likely to face similar resistance this year, but Assembly Speaker Craig Coughlin is looking for money to fund his property tax relief proposal, so he may be open to making a deal.

💲 Another hike in the gas tax?

The sales tax was lowered as part of a deal between Christie and Democrats to increase the gas tax to fund the Transportation Trust Fund.

This year, lawmakers will have to reauthorize the TTF so any changes to the funding mechanism could come when that happens.

The current state tax on gasoline is 42.3 cents per gallon and 49.3 cents per gallon of diesel. That number is adjusted up or down based on the revenue collected to fund the TTF at approximately $2 billion per year.

💲 Business taxes

Another option reportedly being considered is a hike in business taxes.

Business groups lobbied intensely for Murphy to allow a surcharge on the state's corporate business tax to expire at the end of last year.

Murphy did allow it to expire, despite calls to renew it and using the money to fund New Jersey Transit.

Senate President Nick Scutari has been a vocal supporter of reimposing the surcharge.

Assembly Speaker Craig Coughlin has already called for a pause to the proposed 15% fare hikes for New Jersey Transit, and could be supportive of a new surcharge if it meant reducing or eliminating the fare hikes.

💲 What happens next?

It is not known how far along in the budget process Murphy and legislative leaders are, but nothing concrete has been produced by either side that would indicate the direction of the talks.

New Jersey could be looking at a budget deficit of a billion dollars or more, and most believe some form of tax hike is inevitable.

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