It has been five months since New Jersey officials issued warnings about a financial disaster related to coronovirus. The stricter approach contributed to the lawmakers’ decision to become one of the first states to borrow billions to raise taxes on incomes above $ 1 million and cover operating costs.
But the Holocaust forecast has since brightened considerably, with officials saying the Democratic governor, Philip D. Enabling Murphy, on Tuesday to unveil a plan to spend $ 44.8 billion, which calls for no new taxes, some cuts, and an old problem to deal with. State’s low pension program for the first time in 25 years.
The governor also said that there would be no increase in New Jersey transit fares.
“The news is less bad,” said State Treasurer, Elizabeth Maher Muyo. “I wouldn’t say it’s good, but it’s less bad.”
The governor’s election-year financial blueprint relies on retail sales and better revenue than high-income people who lost fewer jobs during the epidemic than lower-income workers and took advantage of the prolonged Wall Street rally Have been.
Ms. Muyo said that $ 38 billion has been received by New Jersey and its residents in federal stimulus funds, a short-term expansion of the corporate tax and $ 504 million from the so-called millionaire’s tax.
Debate over Congressional President Biden’s $ 1.9 trillion virus relief package continues as New Jersey’s proposed 2022 fiscal year budget releases. The proposed package includes grants and loan programs for states and municipalities as well as small businesses.
Other states have also seen similar strong signs of economic rebound as virus cases have increased across the country in the past several months and the death toll in the country has risen to over 500,000 on Monday.
Earlier this month, the Nonpartisan Congressional Budget Office concluded that large sectors of the economy were better suited to the epidemic than originally expected and that the December economic aid package helped.
Mr Murphy, who is running for re-election in November, said the spending plan was designed not only to enable the state to scour through the epidemic, but to help strengthen it .
“It is time to tilt into policies that can fix our decades-old – or in some cases centuries-old – disparities,” the governor said in a budget speech on Tuesday.
A major pillar of the budget is a proposal to fully fund state public sector pension obligations for the first time since 1996.
Ms Muoyo said the state had not separately determined the full amount of its pension obligation for 25 years, contributing $ 4 billion in additional debt. Under brokerage from the Legislature, Mr. Murphy was on track to fully fund part of the state for 20239 years. But the spending plan released on Tuesday sets aside $ 6.4 billion for the pension system, accelerating full funding in a year.
The governor said, “New Jersey is done to kill the problems down the road.” “We are solving them.”
Officials said that under the plan, the state’s surplus, which was an important resource during the first wave of the epidemic, would not develop, but would remain at the same level it was in late 2020.
- As vaccine production increased, the White House announced another increase in how many doses the states receive weekly.
- Scotland plans to gradually lift sanctions starts with schools.
- Two studies confirm that a new variant is more contagious in California, but its risk scale is unclear.
Mr. Murphy’s spending plan, which must be approved by the Legislature, is controlled by Democrats by the end of June, $ 20 million to create a “Cover All Kids” insurance program for the state’s estimated 88,000 children for health care Sets aside. .
When lawmakers approved a 10.75 percent tax rate on incomes over $ 1 million in September, they also instituted a rebate of up to $ 500 for taxpayers who earn less than $ 75,000 per year. The proposed budget sets aside $ 319 million for the first year of the exemption, which will be released in July – three months before the governor and state lawmakers for re-election.
The proposed budget is 8.8 percent larger than the current financial year.
State Senator Declan O’Saconlon, a Republican who represents much of the North Jersey Shore, said the spending increase was unsustainable.
“We need to remember where we started, before the epidemic, because that’s exactly where we’re going to end up.” “Furthermore, the hole will be deeper, our children’s debt will become even more enormous and the path to true reconciliation will be even more inaccessible.”
In November, the state borrowed $ 4.29 billion to cover its operating costs, a move that Republicans tried to fail, citing the burden it would have on future generations of taxpayers. Administration officials said the state is not expected to start paying interest on that loan during the fiscal year covered by the proposed budget.
James W. Hughes, Edward J. The former dean of the Bloustein School of Planning and Public Policy of Rutgers University, said the state’s decision at the time turned to borrowing.
“Hughes said,” It’s been much used, but whatever the term is – unprecedented, unchanged water – five, six months ago.
“In the summer we were still not sure on the scale of layoffs if we could have been after a traditional recession,” he said.
During the peak of the epidemic, when most businesses were shut down in an attempt to slow the spread of the virus, 831,000 people were employed. Mr Hughes said the number of jobs had doubled in the last 10 years.
“If it’s not terrible,” he said, “I don’t know what kind of metric is terrible.”
Since then, the state has recovered about 58 percent of those jobs, but an estimated 350,000 residents remain out of work.
State Senator Michael L. Testa Jr., a Republican who sued the state Republican Party to try to stop November borrowing, said employment revenue estimates prove the $ 4 billion loan was unnecessary.
“It was very much our whole argument: that revenue was going to be far better than the disappointing estimates outlined by the Murphy administration,” Mr. Testa said. “All it has done is allow the Murphy administration to play Santa Claus with giveaways in an election year.”
State Senator Paul Sarlo, a Bergen County Democrat who heads the Senate’s budget committee, praised the governor’s proposal, but warned that the revenue increase could be short-lived.
“The economy still remains fragile,” Serlo said. “Because we are dependent on federal aid with a limited life span and on long-term borrowing to bridge the gap, we should put this spending plan into a two-year perspective so that we can have a cl fiscal cliff with drop-offs.” Avoid Of revenue in the near future. “