Senate Republicans released a budget on Thursday that calls for $8 billion in tax cuts using excess revenue the state is expected to collect in the current and next fiscal year.
While many of their proposals appear to produce increased spending and structural tax cuts, the Democrats who control Congress are unlikely to adopt the Republican budget proposal.
“We are in an unprecedented situation where families are struggling to pay their bills amid the highest inflation in a generation, while states are bringing in record tax collections of billions more than expected. said Senator Steve Orojo, the leader of the House Minority Party. “We have put forward a comprehensive and responsible plan that includes structural reforms to provide significant tax and toll relief at a time when New Jerseyers desperately need it.”
Chief among the Republican non-regular proposals is to pitch $4.5 billion in one-off rebates under two Republican programs that have not passed Congress. Families under $500,000 will receive a $1,000 rebate, and families under $250,000 will be eligible for another $500 rebate.
They said these programs compare favorably with Gov. Phil Murphy’s proposed ANCHOR tax relief program, which provides some homeowners with an average initial tax credit of $700. offered, and increased over the next few years, giving some renters up to $250.
Unlike ANCHOR, the Republican proposal will not recur and will maintain the existing Homestead Benefit Program and Middle Class Tax Rebate (the programs that Murphy’s ANCHOR seeks to replace).
Negotiations are underway between Democratic legislative leaders and the Murphy administration on the governor’s budget proposal. Congress Speaker Craig Coughlin (D-Middlesex) said Democrats would have their own spending plans.
“With this year’s budget, we’ve implemented the largest tax cut program in the state’s history while also making sure that we’re ready to use our surplus to weather the looming storm,” he said. ‘s proposals include property tax cuts where people need them most.”
A Senate Democratic spokesman declined to comment on the Republican plan.
tax cut
Republicans have proposed more than $1.1 billion in tax cuts, and those tax cuts will continue.
Among them is a provision to raise the income tax deduction for retirees from $150,000 to $250,000, a change expected to cost $165 million annually. Another provision enacts a $530 million corporate business tax relief by ending his 2.5% surcharge on business net income over $1 million. A state-based multinational company.
Republicans are also proposing to link New Jersey’s income tax bracket to inflation. cost is likely to double over the next few years.
The Republican plan calls for states to double the veterans tax credit from $250 to $500. This would require a constitutional amendment and would cost the state $30 million a year.
Overall, the Republican cut plan threatens to force spending cuts or tax hikes after revenues return to past levels, but the Republican caucuses said the changes would put them ahead of a possible recession. He said the economy in New Jersey would stabilize.
“Some will say these tax cuts will bore a hole in future budgets…we strongly disagree,” the Republican budget resolution states. “Conversely, a combination of short-term and long-term strategies to deliver deep tax cuts will do just that to mitigate a potential recession. It helps you recover to
federal dollar
The Republican proposal calls for New Jersey to spend most of the $3 billion in unallocated federal aid it received under the federal American Rescue Plan.
Republicans will use about $1.2 billion of that to prevent unemployment tax hikes, primarily for employers, caused by a surge in unemployment insurance claims early in the pandemic and depletion of state unemployment funds. is proposing.
They are also seeking to set aside an additional $600 million for local capital programs, and have requested $200 million to boost state school aid to several districts that have recently lost state funding. I’m here.
An additional $570 million in federal funding will be used to improve state parks and build flood resilience statewide, while $30 million will facilitate funding for fire departments and emergency medical service providers.
The remaining funds will go to state, local, and nonprofit capital projects. For example, he gets $400 million to upgrade the state’s IT network, and the same amount for university capital projects.
others
To make up for the slack on the revenue front, Republicans called on the state to take over collecting income taxes for New Jerseyers working in New York, noting that many commuters have started working remotely during the pandemic. Reform will probably have to be litigated.
They also pitched a pension reform that they said would bring the state $600 million in its first year by moving state workers to a 401k-style plan, but any change to pensions would be politically unacceptable. It is likely to be a non-start factor.
And they asked the state to set aside $1.8 billion to pay off existing debt or avoid future debt. It’s not clear if it will go into the Debt Consolidation Fund.
Republicans, like Democrats, said they needed to reinsert language in the budget that would allow Congress input on how the federal budget is spent, but they said the Joint Budget Oversight Committee I want the entire Congress to vote on such issues, rather than
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