New Jersey Gov. Phil Murphy speaks to reporters after signing a bill in Paulsboro, N.J., Thursday, July 6, 2023. (AP Photo/Wayne Parry, File)
The budget also takes aim at another campaign promise Murphy had made: setting up a funding source for the state's often beleaguered transit system. The system has regularly had to use capital funds just to keep up operations, limiting resources for system-wide improvements. To help close the gap Murphy is proposing a 2.5% tax on business profits of companies that netting more than $10 million annually.
The proposal comes after a temporary business tax increase ended at the end of last year. That surcharge affected some 3,100 businesses, according to the administration, while the new proposal would levy taxes from about 600 firms. Murphy said small and medium sized businesses would not be impacted.
Business leaders decried the increase, arguing the governor essentially went back on a commitment to keep the corporate tax rate down.
"When you make promises that drive investment, and then renege on them a few weeks later, it goes well beyond creating terrible policy," said Michele Siekerka, president of the New Jersey Business and Industry Association.
Advocates for groups representing workers who use transit said the increased taxes were necessary.
"Governor Murphy’s move to reinstate a partial corporate business tax to fund NJTransit is an important step to make the wealthiest corporations — now reaping record profits -- pay their part to keep our state afloat," said Sara Cullinane, the director of Make the Road NJ, an immigrants rights advocacy group.
The state's budget has grown significantly since Christie left office after signing a $34.7 billion spending plan. The state takes in income, sales and business taxes to fund a mix of programs and services, including state government itself but also education and health care funding.
Murphy is also proposing to continue a property tax relief plan first initiated in 2022 that doled out up to $1,500 in tax rebates to families that make up to $150,000, as well as aid for renters. As initially envisioned the program helped under a million households. The new budget would increase the benefit to 1.3 million households, Murphy said, though it's not clear exactly how.
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The budget isn't final and must first pass through the Democrat-led Legislature, which has until June 30 to pass a spending plan to Murphy.
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