Republicans decry tax hikes ahead of budget address

BY Michael Aron, Chief Political Correspondent |

The clock in the Assembly chamber hadn’t been moved forward yet late on Monday morning. By the time Gov. Phil Murphy delivers his budget address there Tuesday, the time will be right.

But will it be the right time for a tax hike? Republican leaders say no. They say income tax collections are running way ahead of projection, between $800 million and $1.5 billion ahead, and that the money should be spent to ease property taxes.

“Any changes that Gov. Murphy makes should focus on property tax relief. Any new investments or extra revenues should focus on property tax relief,” said Senate Minority Leader Tom Kean.

Kean offered four ways of spending the money: increase homestead rebates, make a larger state contribution to the pension system, return energy tax receipts to municipalities or increase state school aid.

“It’s important to note that these increased revenues cannot be simply absorbed into additional spending. We need to focus on real property tax relief because we don’t know yet if these are recurring revenues or not,” said Kean.

The minority Republicans warned against any new tax increase. Murphy campaigned on a promise to hike the income tax on million-dollar earners and is almost certain to propose it Tuesday.

Senate President Steve Sweeney wants instead a 3 percent surcharge on the corporate business tax. Republicans, looking to get out ahead of Tuesday’s budget message, cried ‘no’ Monday on the taxes.

“Think about what the problem is in New Jersey,” said Republican Minority Leader Jon Bramnick. “The problem is that people cannot afford to stay here. So, change course. Reverse your campaign promises.”

“We thought we were going in the right direction when Sen. Sweeney was talking about not doing the millionaire’s tax. We have to do a study on that, let’s take a hard look at that. We thought, well maybe they’re getting it,” said Deputy Minority Leader Bob Singer.

Murphy dodged questions about Tuesday’s budget address at a radio call-in on Monday afternoon.

“We’re hellbent on building that stronger, fairer New Jersey that works for everybody,” he said. “And that’s a lot of different steps, there’s no magic wand. I wish there was, but there’s a lot of different steps and you’ll see elements of that tomorrow.”

Democrats say a revenue windfall doesn’t cancel out the need for more tax revenue.

“I can tell you every dollar available to be spent will be spent. And raising taxes will always be a last resort, especially when it comes to the working class, the middle class and households,” said Assemblyman John Burzichelli, who chairs the Appropriations Committee. “But to say as we’re standing here exactly what we’ll do with the surplus a little better than last year, it’s too early to say that.”

“We’re competing with Pennsylvania every day, the Lehigh Valley up toward me is booming, and parts of my district they jump right over, they just go to Pennsylvania. Whether it was a Democratic governor or a Republican governor in Pennsylvania they’ve eaten our lunch,” said Republican Assemblyman John DiMaio.

Ultimately, it’s what the Democrats think that will carry the day. Whether it’s Murphy’s millionaire’s tax or the Sweeney corporate business tax surcharge, despite the news about a healthy surplus, a tax hike feels like it’s in the air.