New Jersey lawmakers advance budget hiking taxes on wealthy

New Jersey lawmakers on Tuesday advanced a $32.7 billion budget that hikes income taxes on millionaires and businesses.

The Democrat-led Assembly and Senate budget committees advanced the spending plan, with Republicans voting no. Votes are expected in both chambers on Thursday.

The nine-month budget was shortened because of the COVID-19 outbreak. When combined with the three-month, nearly $8 billion stop-gap budget that expires Sept. 30, the fiscal year 2021 plan is about 4 percent bigger than the previous year.

Lawmakers included an income tax increase on those making more than $1 million a year, as well as on businesses making more than $1 million.

The tax on millionaires was part of a deal Democratic Gov. Phil Murphy reached with Democratic legislative leaders last week. That agreement also included rebates of up to $500 to couples making up to $150,000 with at least one dependent child and single parents with at least one dependent child making up to $75,000.

Those rebates, though, aren’t expected to go out until August 2021 and are expected to be included later.

Republicans rejected the spending plan.

GOP state Sen. Steve Oroho said the rebates amounted to an effort to entice voters in next year’s gubernatorial contest. Murphy has said he plans to seek re-election.

“They’re a Murphy re-election rebate,” he said.

Tuesday’s budget includes some changes compared with the one Murphy unveiled in August. It calls for increasing borrowing from $4 billion under Murphy’s plan to $4.5 billion.

The increased borrowing reflects concerns that a second COVID-19 wave could hit this fall or winter, according to the state Treasurer’s office.

Treasury spokeswoman Jennifer Sciortino said in an email that the administration must certify any revenue shortfall before any debt is issued.

Murphy supports the legislative plan that advanced Tuesday, according to his office.

Under the plan, people will be taxed at 10.75 percent on every dollar they make over 1 million, up from 8.97 percent. Businesses making more than $1 million currently face a rate of 10.5 percent. That will rise to 11.5 percent under the budget.

- Associated Press