NJ Budget “Plan”: Another $1 Billion in Taxes and $4 Billion in Debt

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Posted by Doug Kellogg on Tuesday, August 25th, 2020, 4:58 PM PERMALINK

It’s taxation as usual in New Jersey. Governor Murphy delivered a revised budget address on Tuesday, with the legislature having passed a stopgap budget earlier in the year. The plan pushes for  around $1 billion in tax hikes, through many familiar proposals with some added coronavirus spin.

Before this second version of an annual budget was even released, the state enacted a massive, nearly $10 billion bonding plan with the stated purpose of covering coronavirus-related shortfalls. This plan carries a near-guaranteed property tax surcharge that will be added to the bills of taxpayers to pay back the debt.  

On top of that, the state legislature recently passed a new tax on health insurance plans. A financial transactions tax that will impact all investors is among other proposals that could also threaten New Jersey taxpayers.

On the heels of these new burdens and threats comes Murphy’s updated tax hike wishlist.

Once again, he wants a millionaire’s tax on earnings from $1 million to $5 million annually – a policy that promises to drive out high earners and employers, many of whom already have one foot out the door because of coronavirus.

Stop if you’ve heard this one before, a temporary surcharge on large businesses would become permanent under Murphy’s plan.  

Murphy is also seeking a tax hike on cigarettes, a desperate move to grab at a dwindling revenue source. He continues his attempts to price low and middle-income New Jerseyans out of their Second Amendment rights with fee hikes on gun ownership, like a $48 increase in the handgun permit fee and $95 increase in the firearms I.D. card fee.

Boat sales would also see a tax increase – maybe the Governor isn’t a fan of Jersey Shore boat parades – as would limousine services. Limousine services which have been crushed by the pandemic, facing a punitive tax hike…

Even with all his debt and tax hike plans, Murphy still admonished Washington, demanding Republicans in Congress give New Jersey a no-strings-attached bailout. Yet, despite everything, New Jersey tax revenues are recovering swiftly. An earlier $7.7 billion projected budget gap is now actually $5.6 billion.

Murphy may try to use the pandemic to justify his plans, but he is increasing spending on new programs, and rushing to cover unaffordable government pensions rather than reform them.

The state remains mired in a very strict coronavirus lockdown, with thousands of businesses having shut down permanently. With people losing jobs, and thinking of moving out of state, there are many reasons an already bad idea – raising taxes – is an even worse plan than usual.

With tax hikes and more debt, Murphy’s budget proposal would keep government fat and happy while more New Jersey residents give up on paying the bill for it.

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