Gov. Phil Murphy of New Jersey kicked off the budget season (Photo: WBGO)
Gov. Phil Murphy of New Jersey kicked off the budget season by announcing his spending priorities including doubling the child tax credit for fiscal year 2024, which begins on July 1.
His top priorities include increasing affordability by extending last year’s tax relief initiatives and expanding the state’s budget surplus to $10 billion in preparation for a possible recession.
The Murphy administration wants to invest heavily in universal Pre-K, doubling the child tax credit benefits up to $1,000 per child, and provide an additional $830 million in K-12 education funding.
The Democrats’ $53 billion plan also includes a renewal of the ANCHOR property tax relief program, which provides tax credits to more than 2 million eligible residents, and an expansion of the Senior Freeze property tax relief program.
Micah Rasmussen, a political analyst and the Rebovich Institute For New Jersey Politics director, described Murphy’s “feel good” budget like doubling the child tax credit.
READ ALSO: New Jersey Gov. Murphy Offers $1 Billion For A Universal Pre-K That Doubles The Child Tax Credit
Rasmussen said lawmakers would make some changes as they campaign for re-election this year, but he believes the Murphy administration will largely get its way.
Murphy’s proposal drew criticism from both Republicans and progressives. As in previous years, the GOP sought a cap on government spending, a reduction in tax collections, and indexing of tax brackets.
New Jersey Citizen Action and the New Jersey Policy Perspective are concerned about Murphy’s plan to phase out the 2.5% corporate business tax surcharge for the state’s wealthiest corporations at the end of 2023. It had been in effect for the previous five years.
According to the New Jersey Policy Perspective, eliminating the corporate business tax surcharge would cost the state at least $664 million in annual revenue.
The move was applauded by business groups such as the Chamber of Commerce Southern New Jersey (CCSNJ). However, the chamber expressed the same concerns as Republican lawmakers about this year’s spending increase.
Trenton resident and former city council candidate Kadja Manuel hopes state lawmakers will prioritize aid to the capital city, which has been in financial trouble for years.
Manuel referred to Trenton as a “food desert,” claiming that the city requires more investment in nutritious meals and healthcare services.
Murphy’s budget makes full payments on state pension plans for the third year and funds a first-time homebuyer program.
The second-term Democrat also promised to reduce the state’s debt by depositing $2.35 billion in the Debt Defeasance and Prevention Fund.
READ ALSO: A Comprehensive Guide to Child Tax Credit: Eligibility and Claiming Process
