Gov. Murphy Signs $32.7 Billion Budget Into Law, Including a Tax Hike on Millionaires

Sep 29, 2020

New Jersey Gov. Phil Murphy has signed a state budget that he and top Democratic lawmakers say will help the state recover from the devastation wrought by the COVID-19 pandemic and prepare for a possible second wave of the virus.

The $32.7 billion, nine-month spending plan also includes Murphy’s long-sought tax hike on millionaires, which he said will allow the state to help low-income and middle-class families.

New Jersey Gov. Phil Murphy. (Edwin J. Torres/Governor's Office)

“A budget is a statement of values. A budget is not a document for today alone,” Murphy said before he signed the legislation Tuesday. “This budget is a statement of the values that will guide us along the path of restart and recovery. At every step along this path, this budget will be there for the people of New Jersey.”

Republicans and business groups have slammed the budget proposal, particularly the tax hikes on millionaires and companies as well as the state’s plan to borrow $4.5 billion to make up for revenue shortfalls.

The state Supreme Court ruled this summer in a lawsuit brought by the state Republican Party that the Murphy administration could borrow billions without voter approval for expenses related to the public health emergency.

“This will be the most expensive year ever, and it didn’t have to be that way,” said state Sen. Steve Oroho, R-Sussex. “That massive debt increase avoided constitutional scrutiny by state voters, and will be used not for basic services but to create a fake ‘surplus’ for the administration to spend at will.”

Under the budget, people who earn more than $1 million will see their income tax rate jump from 8.97% to 10.75%. Residents who earn more than $5 million already pay the higher rate. Murphy and top legislative Democrats announced that the state will also provide up to $500 in tax rebates to low- and middle-income families that qualify.

The budget also maintains the previous level of state funding for K-12 education and keeps a school-based mental health services program that initially was on the chopping block in Murphy’s first budget proposal.

“Some of my colleagues are telling horror stories about their state governments cutting necessary, vital, true-value situations in their state, only to have to rebuild when this is over,” said Marie Blistan, president of the New Jersey Education Association. “We are investing in things that will keep New Jersey strong.”