FY2021 State Budget
On February 28, Governor Phil Murphy delivered the FY2021 budget address to a joint session of the Legislature. The $40.85 billion state budget consists of three general themes: boosting funding for public schools, stabilizing property taxes and tax fairness and contained nearly $1 billion in new taxes and fees.
In the address, Governor Murphy proposed extending the personal income tax rate – otherwise known as the “millionaire’s tax” - on those whose incomes fall between $1 and $5 million annually from 8.97 percent to 10.75 percent. It is anticipated that this tax increase, should it receive legislative approval, would add $494 million in FY2021 revenue. Similar to last year, the Governor proposed a tiered version of the Corporate Responsibility Fee for private employers receiving state Medicaid benefits. The fee applies to both employees and dependents and is set at $325 for employers with 50-250 employees covered by Medicaid, $525 for 250-500 covered employees, and $725 for employers with more than 500 covered employees. Additionally, the Governor has called for a tax on opioid manufacturers and distributors generating $20 million in FY2021.
As for savings, the Governor announced this budget includes nearly $400 million in departmental cuts and approximately $174 million in proposed health benefits savings, all of which the CCSNJ was pleased to hear.
On March 12, at Rowan University’s Rhorer College of Business, the CCSNJ testified before the Senate Budget & Appropriations Committee on the FY2021 state budget. The CCSNJ was again the only South Jersey business organization to weigh in on how the budget would impact the regional business community.
On April 1, due to the COVID-19 crisis, Governor Murphy, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin announced changes to the tax filing deadline and the state budget timetable. The Administration and legislative leadership reached agreement that the state income tax filing deadline and the corporation business tax filing deadline will be extended from April 15 to July 15, aligned with the new federal filing date.
In addition, there is an agreement to extend the state fiscal year to September 30, which will allow the Administration and the Legislature to fully focus on leading New Jersey out of the COVID-19 crisis, and to allow for a robust, comprehensive, and well-informed budget process later in the year. The CCSNJ looks forward to weighing in at that time.
Related Links : https://www.nj.gov/governor/news/news/562020/approved/20200225a.shtml