TRENTON, NJ – Gov. Phil Murphy on Tue., Sept. 29, signed the Fiscal Year 2021 (FY 2021) Appropriations Act into law. The governor said the revised spending plan manages to protect core priorities and deliver middle-class tax relief during the historic fiscal crisis caused by the COVID-19 pandemic.
The budget plan also fully reestablishes the millionaires' tax that expired in 2010, instituting the existing 10.75% rate on income over $5 million to income earned over $1 million.
“As we continue to grapple with the effects of the pandemic, building a stronger New Jersey requires us to continue to bolster the middle-class families who are the backbone of our state,” Murphy said. “This revised budget not only recognizes the realities of the pandemic, offering much-needed tax fairness, including tax relief to the middle class, but also maintains our core principles so that we can emerge from this crisis stronger, fairer, and more resilient.”
The governor initially laid out his FY 2021 budget proposal on Feb. 25. Less than two weeks later, the COVID-19 pandemic hit the state, and the crisis prompted the state to follow the federal government in moving important April tax filing deadlines to July and extending the fiscal year from the traditional June 30 end date to Sept. 30. As a result, the budget signed addresses spending for only the nine-month period from Oct. 1, 2020 through June 30, 2021.
The revised budget the Governor unveiled last month laid out a series of solutions to help close a roughly $5.28 billion budget gap and protect many shared priorities. Murphy believes the budget plan is a significant victory for middle and working-class taxpayers by restoring the millionaire’s tax and delivering tax rebates to approximately 800,000 New Jersey families.
“Our budget restores cuts and makes the investments we need in our state and county colleges, in Extraordinary Special Education Aid for our most vulnerable students, in our hospitals and direct care workers who provide critical healthcare, and in a wide range of other services that are more important than ever in this pandemic,” said Senate President Steve Sweeney.
“Together with the Governor and the Senate we put together a balanced plan that cut nearly a billion in spending, asked the wealthiest among us to share in the sacrifice and made the difficult decision to borrow,” said Assembly Speaker Craig Coughlin. “Our budget delivers for our seniors and working-class families by fully funding the Senior Freeze and Homestead Rebate programs. Our schools and municipalities are receiving the same funding level as last year. Together, we made significant investments in hunger relief, anti-poverty, and health programs to continue to help struggling families through this crisis. Working, middle-class families will receive tangible relief in the form of a $500 rebate next summer. This budget demonstrates our commitment to every New Jerseyan.”
Republicans were less enthusiastic about the budget.
"Gov. Murphy might as well be signing a letter addressed to every NJ taxpayer that reads ‘move to FL or PA. I don't care.' This is the most callous and crippling budget in NJ history," said NJ Republican State Chair Doug Steinhardt about the newly signed fiscal plan.
John Bramnick, Minority Leader of the State Assembly, questioned why there was no media outrage regarding the New Jersey budget process and listed his objections on Twitter stating:
1. The public was not permitted to testify.
2. Media excluded from the Chamber during the debate.
3. Millions spent on various projects.
4. No structural reforms to reduce spending.
5. More taxes.
One item in the Aug. 25 revised budget that did not make the final plan: the so-called "Baby Bonds" that Gov. Murphy proposed giving $1,000 to every baby born to a family under a certain income threshold ($131,000 per year) during 2021 in New Jersey.
"Fortunately it was rejected by the legislature," Bramnick said. "Don’t believe Gov. Murphy has forgotten this plan; he will be back with this and other giveaways soon."
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