(The Center Square) – New Jersey Gov. Phil Murphy has sought to portray himself as a fiscally cautious, business-friendly leader since taking office. But following his budget address Tuesday, it was evident that many in the business community were not on board with that portrayal.
One proposal that specifically drew ire was Murphy’s plan to tax millionaires. The New Jersey chapter of the National Federation of Independent Business said that such a tax would likely fall on its members, including those who might be millionaires on paper but live on narrow margins to keep their businesses afloat.
“The millionaire’s tax will hurt small business owners who retire and sell their business as a retirement nest egg – something many of them do,” NFIB New Jersey State Director Eileen Kean said. “If they started their business years ago and own a building that has risen significantly in value, selling the property, the business, and its assets could easily bring in over a million – along with an extremely high tax bill on their retirement savings.”
“New Jersey already ranks among the top states in the nation for the highest tax rate,” she said. “Taking on billions of dollars in additional debt is going to result in even higher taxes. At a time when small businesses are struggling to come back, the prospect of being saddled with higher taxes is of great concern.”
The New Jersey Business & Industry Association was similarly unimpressed by Murphy’s proposal, calling his plan to boost government spending by $1.4 billion “irresponsible.” They argued that such a move would make New Jersey businesses less competitive with those in other states.
“New taxes on the very same businesses that have already given so much and are the only ones that can drive our future recovery is inconceivable considering that the state was just given $9.9 billion in borrowing authority,” NJBIA President and CEO Michele Siekerka said in a statement. “NJBIA calls on our Legislature to fix this irresponsible budget.”
The Garden State Initiative, a free-market-oriented public policy organization, accused Murphy of failing to realize that the state must “tighten its belt” at a time when business and individuals have no choice but to do so.
“Luckily for New Jersey, our state constitution requires a budget be enacted by the vote of duly elected members in our local state Assembly and Senate districts,” Regina Egea, president of the GSI, said in a news release. “Those legislators will have the
uncomfortable obligation to look homeowners, families, and small business owners in the eye and explain why borrowing $4 billion and raising taxes in order to spend more than last year is a plan that voters should admire.”
Praise did come from the leader of the New Jersey League of Conservation Voters, an organization devoted to environmental issues in the state. Executive Director Ed Potosnak attended Murphy’s budget address and showed his support on Twitter.
“Very pleased to hear @GovMurphy commit to a Green Jobs Recovery to get people back to work while improving our communities and protecting our clean air, water and land!!” Potosnak tweeted.
Murphy’s political opponents in the Legislature were unsurprisingly opposed to the budget plan, particularly the spending outlined.
“With the State credit card in his pocket, Governor Murphy’s budget plan shows none of the fiscal restraint that virtually every family and small business has been forced to exercise due to the coronavirus,” state Sen. Declan O’Scanlon, R-Marlboro Township, said in a news release. “He wants to borrow billions, which will compound to billions more in interest and fees, to support a budget that demonstrates not one shred of creative cost-cutting reform. Generations of taxpayers will be saddled with this burden.”
Legislative Democrats, however, who control both chambers, indicated that they’d give at least some of Murphy’s proposals a warmer reception.
“The unparalleled loss of revenue and the compelling need of New Jerseyans is undeniable and will cause us to make difficult decisions,” Assembly Speaker Craig Coughlin said in a statement. “Assembly Democrats will work with the Senate and the Governor’s office to craft a budget that makes those hard choices. We will keep an open mind as we understand every option and proposal must be thoroughly reviewed and vetted. All options are on the table.”