New Jersey Republicans call for tax cuts, reduced spending

(The Center Square) — New Jersey Republicans are pushing changes to Gov. Phil Murphy’s proposed budget that called for cutting taxes, reducing government waste and controlling spending.

In a letter to Democratic legislative leaders, Sen. Declan O’Scanlon and other GOP lawmakers said previous proposals floated by the minority caucus in two previous budget cycles included “solutions to address the overwhelming waste and excess that has exacerbated New Jersey’s affordability crisis” but that the Democratic majority has “ignored” their recommendations.

So, instead of rolling out a list of new recommendations, Republican lawmakers dusted off a series of proposals they say would reduce state spending and provide relief for taxpayers in next year’s budget.

“Our past budget resolutions sought additional tax relief, a full restoration of school and municipal aid, and financial support for various service providers – all of whom have been struggling due to New Jersey’s affordability crisis,” the GOP lawmakers wrote. “We also proposed how to more-than-pay for these priorities to help address budget imbalances and increase funding for debt reduction.”

The lawmakers said Murphy’s budget includes increases in “highly aggressive employee wage taxes, New Jersey Transit fares and highway tolls, a new “buck a truck” highway tax and a new corporate surcharge. They called on Trenton Democrats to abandon those proposals before they approve the budget.

“In addition to stopping as many of these tax increases as possible, we continue to support an income tax reduction for contributions for New Jersey-based nonprofits,” they wrote. “This will reduce tax burdens and more importantly shift more charitable giving away from out-of-state institutions towards New Jersey based charities, whose health is critical for our state.”

Republicans also called on Democrats to restore proposed cuts to school districts, some of which are expected to see sharp decreases in state aid under a new school funding formula tacked on to the budget.

Murphy’s $55.9 billion budget, which is being negotiated by House and Senate leaders, includes expanded tax breaks for senior citizens and other relief he says will put more than $3.5 billion “back in the pockets of New Jersey taxpayers.”

But Republicans and business leaders say Murphy’s spending package includes increased state spending, tax and fee increases, and a proposed Corporate Transit Fee, which would set a new 2.5% tax on an estimated 600 New Jersey businesses making over $10 million a year in profit.

The new tax would replace the state’s now-lapsed corporate business surcharge – which levies a 2.5% surcharge on net profits above $1 million – which expired at the end of December.

The surcharge was implemented in 2018 in response to a 14-point federal tax cut from the Jobs and Tax Cut Act. The surcharge was meant to be temporary, but Murphy agreed to extend it several times during the COVID-19 pandemic.

The GOP lawmakers also called on Democrats to limit unsustainable programs, control spending increases and adopt additional reforms aimed at saving the state and its taxpayers money.

“It’s not too late for you to finally take our proposals seriously, and fund the bulk of our priorities this year while reducing the state’s structural imbalance,” they wrote. “We stand ready and willing to work with you to develop a truly bipartisan budget.”