Senate Republicans propose $8 billion in new tax relief, bolster surplus, double debt repayment and increase scrutiny in budget plan

Senate Republicans propose $8 billion in new tax relief, bolster surplus, double debt repayment and increase scrutiny in budget plan

Republicans on the Senate Budget and Appropriations Committee proposed $8 billion in new tax relief, boosting the state’s surplus to $5 billion, more than doubling the proposed debt repayment and increasing legislative scrutiny of the Murphy administration’s spending in a detailed budget plan (click here for PDF) to amend Governor Murphy’s proposed state budget for fiscal year 2023.

“Senate Republicans have offered a detailed budget plan to responsibly use an unprecedented $11 billion windfall in state and federal funds to support struggling families, address long-term issues, and ensure New Jersey is well prepared for the next recession,” said Sen. Declan O’Scanlon (R-13), the Republican Budget Director. “We are leading the way by showing Governor Murphy and Democratic legislative majorities how to give back billions to taxpayers while creating a responsible surplus and paying down substantial additional debt. It’s no surprise that everyone is suddenly racing to find ways to “give back” as Senate Republicans have been advocating for months.

The Senate Republican budget plan provides a comprehensive framework for utilizing $8 billion in previously windfall revenue that was recently projected for current and future fiscal years and $3 billion that remains unallocated on the 6.2 block grant. billion dollars that New Jersey received last year through American Rescue. Schemes Act. In addition, it imposes spending restrictions and responds in a balanced way to important needs ignored by the Governor’s budget proposal.

Senate Republicans have proposed $8 billion in increased tax relief for New Jersey families and businesses, including:

  • $4.5 billion through a pair of “Give It Back” tax refunds (S-2243 and S-2290) totaling $1,500 for millions of families;
  • $1 billion in property tax relief by reversing Governor Murphy’s proposed cuts to municipal aid and school aid, fully funding extraordinary special education, increasing the tax deduction land for veterans, and more;
  • $790 million in structural tax cuts, including increasing the retiree income exclusion to $250,000, creating a deduction for charitable contributions, and early elimination of the CBT surtax; and
  • $2 billion to halt planned increases in taxes and tolls by indexing tax brackets to state inflation, replenishing the unemployment insurance fund to prevent future increases in employer payroll taxes/ employees, halting automatic toll increases on January 1, and reversing a major state tax increase. leading health insurer and its customers.

“We have this unprecedented situation where families are struggling to pay their bills amid the highest inflation in a generation while the state is simultaneously bringing in record tax revenues that exceed expectations in the billions,” said Sen. Steven Oroho (R-24), Senate Republican Leader. “Our ‘Give It Back’ rebates would help address this imbalance by immediately returning $1,500 in direct tax relief to most New Jersey families. We also proposed substantial increases in property tax relief, tax cuts for families, seniors and veterans, an end to pending toll hikes for drivers, and an early end an unnecessary tax surcharge for businesses. We have proposed a comprehensive and responsible plan that includes structural reforms to provide New Jerseyans with substantial tax and toll relief at a time when they desperately need it.

The Republican proposal would prepare New Jersey for the next recession through a balanced approach that includes:

  • Increase the budget surplus to more than $5 billion, or about 10% of the budget;
  • Focus one-time revenues on funding non-recurring needs such as pay-as-you-go capital infrastructure investments (including MVC and Unemployment IT system upgrades), restoring the health of the Unemployment Insurance Fund, and more than doubling proposed debt repayments to $3.1 billion;
  • Advance longer-term reforms that strengthen our economy, including the repatriation of unfairly collected income taxes from New York and pension and benefits reforms that end abuse and provide more choice for employees; and
  • Establish additional restrictions in recurrent spending in amounts that far exceed proposed increases to address unfunded priorities.

“We recognize that much of the windfall at our disposal is likely to be one-time, which would make it irresponsible for anyone to propose substantial permanent spending increases that we will not be able to sustain in the next recession, which could be sooner rather than later,” said Sen. Sam Thompson (R-12). “Our plan ensures New Jersey is ready for the next downturn by building a healthy $5 billion surplus that equates to 10 % of budget, while making substantial investments in critical infrastructure, including repairing faulty computer systems out of work and MVC.Given the current financial hardship many families are facing due to high gas prices and inflation, we have proposed temporary school aid restorations to prevent property tax hikes in ns nearly 200 districts which could devastate household budgets. Moreover, we have proposed real reforms that would strengthen the state budget, reduce costs and provide additional relief to taxpayers in good and bad times.

Finally, the Senate Republican budget plan imposes legislative control over billions of dollars that the Murphy administration wants unilateral authority to spend in the coming fiscal year by:

  • Provide full legislative approval of $3 billion in unspent American Rescue Plan Act funding. As part of the current year’s budget, the secretive Joint Budget Oversight Committee (JBOC) is approving proposed allocations after Democratic leaders reached behind-the-scenes deals to distribute the funds. Governor Murphy removed all legislative oversight and approval of these funds in his proposed budget;
  • End blank check provisions in the budget that allow the governor to appropriate funds to settle disputes without legislative approval. That blank check allowed Governor Murphy to pay $53 million unsupervised to settle lawsuits related to unnecessary deaths caused by his administration’s pandemic policies at state-run veterans’ homes. These provisions also allowed the Murphy administration to pay a $21 million settlement without review for a series of administrative lapses that led to serious abuse at Edna Mahan Women‘s Prison;
  • Refuse Governor Murphy’s demands to spend as much money as he wants: expand the scandal-ridden free and reduced-price school meals program; subsidize health insurance underwritten by the State Stock Exchange; and providing free insurance for children of illegal immigrants, which could easily grow from the $11 million proposed by the administration to more than $200 million when fully rolled out; and
  • Eliminate loopholes in debt reduction and avoidance funds that allow for new capital expenditures that are not permitted under the constitution and existing statutory debt authorities. We propose that all funds for debt repayment and avoidance be appropriated by the entire Legislature after a comprehensive and detailed proposal is submitted by the Governor. Otherwise, funds may be allocated by the Governor and JBOC with little transparency for hog spending rather than actual debt reduction.

“If we don’t impose strict legislative oversight and discipline to effectively use the state’s $11 billion windfall, the Murphy administration is sure to cause the ‘hog orgy’ of the last year looks tame,” said Sen. Michael Testa (R-1). “Governor Murphy will solve behind-the-scenes deals to waste this money in unimaginable ways, while New Jersey families and seniors suffer and their taxes and tolls continue to rise unnecessarily. In contrast, our Senate Republican plan is completely transparent and would dramatically increase public contribution, while strengthening state finances and delivering $1,500 in immediate tax relief directly to New Jersey families. There is absolutely nothing in our proposal that a conscientious leader should oppose.

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