Governor Phil Murphy has not announced any plans to spend any of the more than $ 10 billion surpluses in New Jersey, but he is open to expanding a popular property tax break and “things like that,” he said Monday.
His remarks appear to hold the door open to a possible tax break as he prepares to negotiate a final state budget with lawmakers this week.
Murphy’s comments came in response to a question from NJ Advance Media at his regular coronavirus briefing in Trenton as to whether he was considering tax cuts or expanding an existing tax refund proposal given the state’s exceptional surplus.
“There’s no news to report here, but if we find a way to top up the Homestead discount, for example, count me for things like that,” he said. “But again, to determine exactly where we’re getting out of.”
The New Jersey Treasury Department announced last week that tax levies for this fiscal year were $ 4.1 billion, before February forecasts were $ 3.2 billion higher than a fall forecast. The Treasury Department also raised its forecast for the next year by $ 1.1 billion.
The state’s reserves could exceed $ 10 billion by the end of fiscal year June 30. The governor’s proposed budget would reduce this to about $ 6.9 billion in the fiscal year that begins July 1.
In addition, the state has received $ 6.2 billion in federal aid, part of the US $ 350 billion rescue plan for state and local governments. Murphy has also not announced any plans to use this money, which cannot be used for tax cuts.
Lawmakers including Senate President Stephen Sweeney, D-Gloucester, have said the state must be careful not to create one-off income programs that it cannot sustain in lean years.
“I’ll be looking at this in several years,” he said last week. “It’s like musical chairs. And when the music stops, there is a chair, and what falls over in the end? “
Republican Senators on the Budget and Appropriations Committee, following the Treasury Department’s announcement last week, urged the state to use taxpayers’ money to fund direct tax breaks for New Jersey taxpayers.
“We are faced with the situation that we have a lot more money than we expected and it is time to return it to taxpayers to lower their taxes and attend to so many outstanding needs out there,” said Senator Samuel Thompson, R-Middlesex, who is proposing to permanently extend property tax breaks for Homestead and Senior Freeze.
Homeowner credits continue to be based on their 2006 property tax bills, which enables the state to keep program costs down despite rising homeowner bills. Murphy’s proposed budget includes $ 260 million to fund the Homestead benefit program and $ 220 million for the Senior Freeze.
Republicans also recommended that the state allocate $ 1.5 billion to the depleted Unemployment Trust Fund to stave off a July wage tax hike for Garden State employers.
Murphy and the Democratic-controlled legislature have until the end of the month to finalize a budget for the fiscal year beginning July 1. Murphy said Monday that the talks were “extremely constructive, productive and in a very good mood”.
Murphy’s proposed budget includes tax rebates of up to $ 500 for single parents with income less than $ 75,000 and at least one dependent child, and for married applicants with income less than $ 150,000 and at least one dependent child.
These tax rebates are the result of an agreement between Murphy and the Democrats, who control the legislature, to raise taxes for high earners.
The Treasury Department estimates 764,000 households will receive discounts this summer.
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Samantha Marcus can be reached at email@example.com.