A take a look at NJ’s finances proposal: taxes, colleges, pensions

TRENTON, NJ (AP) – Phil Murphy’s $ 44.8 billion budget proposal unveiled last week is a boon to retirees in the labor and public sectors, thousands of citizens and schools across the state.

Although the spending plan must first go through Democrat-led legislation before becoming law, the governor’s proposal, by and large, sets the limits for discussion. At nearly 9% more than last year, it doubles Murphy’s commitment to using tax dollars to boost the state’s economy devastated by the COVID-19 outbreak.

It is an obvious election year for Republicans to raise funding to support prospects for the governor’s re-election. It’s also prohibitive, they claim, with the exception of borrowing around $ 4 billion in the current fiscal year.

It’s hardly atypical for Murphy. Since the 2017 campaign, he has pledged to increase public pensions and school funding to make up for years of neglected payments by governors of both political parties funded by higher taxes on the rich.

The budget is a political focal point, but also a political tool that distributes billions of dollars to millions of people across the state.

The current fiscal year ends on June 30th. Legislators are expected to hold public hearings on the governor’s proposal as early as this month.

A closer look at some of the winners and losers in the governor’s most recent first-term proposal.

TAX LOANS AND DISCOUNTS

Nearly 800,000 residents will receive a tax break of up to $ 500 as part of the budget. That is imminent as to whether there is an agreement last year between lawmakers and Murphy to increase taxes for those who earn more than $ 1 million a year.

Under the deal, couples earning up to $ 150,000 per year with at least one dependent child would get up to $ 500 back. The threshold for individual filers is $ 75,000 per year.

The child and dependent care tax credit threshold, currently capped at $ 60,000, would increase to $ 150,000 under budget.

Around 70,000 families are currently receiving the loan. That would increase by 80,000 under the governor’s spending plan. The average value of the loan would rise by $ 110 for poorer families and reach nearly $ 300. At the higher end of the income spectrum, budget documents estimate the loan to be less than $ 100.

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PENSION PAYMENT BOOST

New Jersey’s public worker retirement plan has been underfunded for decades, but lawmakers and former Governor Chris Christie have started a ramped up payment plan. Murphy wants to recharge this plan and get full payment a year earlier than budget.

The payment would increase by $ 1.6 billion in the current fiscal year. The payment does not lead to an increase in pensions for retirees. However, actuaries have determined what amount the state will have to pay to meet its share of the cost of paying annuities to hundreds of thousands of retirees.

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SCHOOL FINANCING

Schools would receive nearly $ 600 million more in funding, an increase of nearly 7 percent. Murphy’s predecessor declined to budget the state’s school funding formula. Murphy estimated this turned out to be about $ 9 billion over eight years. Murphy hasn’t closed the void, but he argues that raising funding is better than staying in the apartment. He also raises school fees as a property tax break.

While government funding for schools has slowed the rate of growth in local property taxes, they still average more than $ 9,000 a year – one of the highest in the nation.

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Transit prices

Murphy is keen to keep NJ Transit fares flat for a fourth year – which means no hike for drivers. Despite the price hike, the governor’s proposal calls for $ 100 million from the transit agency’s capital budget to fund operations, a long-running raid that goes back years. The governor said he wanted to find a dedicated source for NJ Transit, but that budget doesn’t make it.