NJ Politics Digest: Murphy Budget Calls for Taxes on Millionaires

New Jersey Governor Phil Murphy delivering the 2019 New Jersey State of the State address in the Assembly Chambers at the New Jersey State House in Trenton.
New Jersey Governor Phil Murphy delivering the 2019 New Jersey State of the State address in the Assembly Chambers at the New Jersey State House in Trenton. Michael Brochstein/SOPA Images/LightRocket via Getty Images

Gov. Phil Murphy outlined his plan for next year’s budget, renewing his call to raise taxes on millionaires and gun owners while increasing aid for public schools.

The proposal, introduced in a speech to the state legislator, sets up a fight between Murphy and the leaders of his own party, who have come out firmly against raising taxes again on the state’s wealthiest residents.

While Murphy’s proposal touted the $1.1 billion he claims to have saved—mostly through changes in public worker health benefits—Senate President Steve Sweeney and Assembly Speaker Craig Coughlin claimed much more can be saved by examining public worker wages and benefits.

Sweeney has warned that further taxing high earners will only drive them out of the state. He has also long talked about the need for the state to rein in costs and has been pushing fiscal policy reforms he says will reduce the state’s pension and health benefits costs.

Murphy, who is closely allied with public worker unions, has pushed back against Sweeney’s efforts, setting up another likely showdown as budget negotiations begin early this summer.

Murphy’s plan calls for a $206 million in state school funding and flat funding for property tax relief programs.

It calls for $60 million to be raised through taxes on legalized recreational use of marijuana, even though the state legislature has yet to take up a bill and the push to legalize pot still remains in doubt.

Murphy’s plan would also tax companies with more than 50 employees $150 for every employee enrolled in Medicaid in an attempt to to encourage them to provide employee health benefits.
Murphy would also raise fees for gun permits and increases taxes on ammunition, boosting the cost of a state firearms ID card from $5 to $100 and a handgun carry permit from $50 to $400.

The state must adopt a budget by July 1. Last year, negotiations came down to the last minute, as Murphy gave in on some of his demands to raise taxes and averted a state government shutdown.

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NJ Politics Digest: Murphy Budget Calls for Taxes on Millionaires