New Jersey Lawmakers Pass Budget With Heftier Millionaires Tax
By Kate King
New Jersey lawmakers passed a $32.7 billion budget Thursday,
which will be funded in part by increased income taxes on the
Democratic Gov. Phil Murphy has long pushed to increase taxes on
millionaires, but it wasn't until the coronavirus pandemic
delivered a body blow to state revenue that the legislature's top
leaders, also Democrats, agreed. Under a bill passed Thursday, tax
filers earning between $1 million and $5 million will pay 10.75% in
income tax, up from 8.97%, on earned income above $1 million. All
income above $5 million is already taxed at the higher rate.
The increased tax rate is expected to bring in at least $390
million in annual revenue and would take effect during the 2020 tax
year. The legislation also provides for annual rebates of up to
$500 for families earning below $150,000. The rebate program is
expected to cost the state at least $300 million a year starting in
Republican state Sen. Declan O'Scanlon said the rebate would
give away nearly all the funding generated by the millionaires tax.
Some Republicans opposed the bill because they said it would force
wealthy residents to move out of the state. "The lame rebate
scheme, tied to this massive job and economy-killing tax increase
does no favors for the beleaguered taxpayers of New Jersey," Mr.
Lawmakers also voted to increase and extend until the end of
2023 a surcharge on businesses earning more than $1 million. The
move is expected to bring in more than $200 million in additional
revenue next fiscal year, which begins Oct. 1.
Both chambers of the Demoratic-controlled legislature voted
largely along party lines to approve the budget. Mr. Murphy was
expected to sign it into law.
State Sen. Paul Sarlo, a Democrat, said the increased taxes were
necessary to help the state weather a fiscal crisis worse than what
it experienced after the terrorist attacks of Sept. 11, 2001, the
recession that started in 2008 or superstorm Sandy in 2012.
"This is not a normal budget, and these are not normal times,"
he said. "This is a COVID budget that we have to do to contend with
the crisis conditions created by the pandemic conditions on the
State Sen. Tom Kean, a Republican, voted against the spending
"This budget is a wasted opportunity to restructure our state's
finances in a way that will safely and responsibly rebuild our
state's economy," he said.
Write to Kate King at Kate.King@wsj.com
(END) Dow Jones Newswires
September 24, 2020 16:17 ET (20:17 GMT)
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