After a week of a standstill in budget negotiations, Gov. Phil Murphy presented a peace offering to the legislature Tuesday. The Governor’s Office has released a letter that Gov. Phil Murphy sent to Senate President Steve Sweeney, Assembly Speaker Craig Coughlin and all members of the Senate and Assembly offering a significant compromise.
There are three concessions, and three sweeteners in the letter.
The first concession is imposing a surcharge on the corporate business tax, which is what the legislative leaders have been holding out for, but it would not sunset after two years. It would be recurring, and it would be at a rate that, “does not make New Jersey an outlier nationally.” Right now, the proposal is to increase the CBT, the corporate business tax, to 13 percent on large corporations. That would be the highest in the nation. The governor is saying let’s make this a permanent tax, but not the highest in the nation.
The second concession he’s making is that he’ll lower the amount of the millionaire’s tax that he’s been calling for. He’s been calling for a top rate on million dollar incomes of 10.75 percent. He’s now saying he’d go for a modest increase in the marginal tax rate on personal income.
The third concession is where he’s calling to restore the sales tax immediately from 6.625 percent to 7 percent, back where it’s been for a decade. Now he’s saying he would phase that in over two years.
The first sweetener is that he would go along with Coughlin’s proposal to restore the Homestead Rebate to where it was two years ago. It was cut in half a year ago and Murphy was going with the half for the current year. Now he’s agreeing to double it.
He’ll go along with Coughlin’s proposal for a tax amnesty program, which is something he indicated Monday that he was flexible about.
And he will sign the school funding law that’s near and dear to the heart of Sweeney. Murphy has been using that as leverage.
This is a significant offer to the members of the Legislature. It could be the compromise that’s needed. Multiple calls were not returned at the time of this report.
This is halfway, or maybe a little more, for Murphy to come regarding a compromise. Sweeney thinks that taxing people is not a good idea, that we need to tax corporations that got a windfall from the Trump tax cut. This embraces a little bit of that, and adheres to a little bit of what Murphy wanted. There is still a millionaire’s tax, there is still a sales tax, which is what Murphy wanted.