(The Center Square) – The Democratic-controlled New Jersey Legislature passed a $32.7 billion state budget Thursday, but not before a heated debate with Republicans.
The budget, which takes effect Oct. 1 and runs through June 30, 2021, includes an increased tax on income of more than $1 million and a 2.5 percent surcharge on corporate profits over $1 million. This year’s budget does not include a tax rebate of up to $500 for couples with children that meet certain income limits that is part of a budget compromise reached between Gov. Phil Murphy and legislative leaders. Families will receive the rebate next summer, after their 2020 tax returns are filed.
Republicans criticized the governor for holding on to money from the federal Coronavirus Aid, Relief, and Economic Security Fund.
“There are billions still not spent months after it could have helped families and businesses across the state,” said Sen. Tom Kean.
The plan includes up to $4.5 billion in borrowing from the federal government and a $2.5 billion in surplus that Assemblyman Hal Wirths called “fraudulent and fake.”
"It’s insulting to say you are borrowing $2.5 billion and that’s a surplus,” Wirths said. “This is not how I do math.”
Assemblyman Brian Bergen said Democrats were misleading when they proposed the borrowing plan.
“Today, after borrowing the money, they are talking about how they are using that for smart planning, increasing our savings, improving our credit rating,” Bergen said. “That wasn’t the story being sold to us when the borrowing bill was produced. That was not the testimony in front of the Supreme Court.”
Republicans challenged the borrowing plan in the New Jersey Supreme Court but the Court ruled in favor of the plan.
Assemblywoman Eliana Pintor Marin, who chairs the Assembly Budget Committee, said Republicans are being a “little delusional.”
“I think the key element that we are all missing is the fact that without borrowing, we are not going to be able to accomplish the things that both of us, both sides of the aisles feel are important,” Pintor Marin said. “At the end of the day, you have to make those decisions if we want to keep the economy going, it’s economics 101. You’re still going to have a certain level of spending into the economy and you have to give people what it is that they need in order to survive.”
The Assembly approved the budget along party lines, with Democrat Roy Freiman abstaining.
The Senate also voted along party lines after an equally raucous debate.
Sen. Michael Testa said he had heard the word justice mentioned but wanted to know, “When are we going to have a real discussion about taxpayer justice?”
“We are not making New Jersey strong and fairer,” Testa said. “We are making New Jersey weaker and poorer. Period. Full stop. We aren’t going to make New Jersey any more inhabitable through higher taxes.”
He said Gov. Phil Murphy is using COVID-19 as a Trojan horse to ask for “unnecessary deficit borrowing.”
“They ballooned the borrowing and now we have a Trojan elephant,” Testa said. “It’s not very well disguised. You can see the orgy of pork in fake surplus and promised rebates staring out of its smirking corpulent mouth. “