Budget Deal: Here’s What You Need to Know

Shutdown averted!

Months of drama over the budget ended this weekend when Gov. Murphy and legislative leaders reached a deal that kept the state open and turned the page on years of austere fiscal policy.

This year’s budget makes bold, new investments in critical public assets like public education, transit infrastructure, and affordable housing. It also ensures New Jersey’s wealthiest individuals and corporations pay their fair share in taxes. NJPP has been a strong advocate for many of the important changes realized in this budget.

Thanks to your support, some of NJPP’s most important policy recommendations made it into this year’s budget. These big wins include:

A Fairer Tax Code:

  • Mega-Millionaires Tax: New Jersey’s tax code just got a little more progressive with the creation of a new tax bracket for the state’s wealthiest individuals. Earnings over $5 million per year will now be subject to an income tax rate of 10.75 percent.
  • Corporate Business Tax: After receiving a windfall from last year’s federal tax changes, large corporations will now pay an average 2 percent surtax to help fund critical programs that all New Jerseyans rely upon.
  • Closing Loopholes: New Jersey is now the 27th state, plus DC, to enact combined reporting, a measure that stops corporations from hiding taxable income outside of New Jersey.

Important New Investments:

  • Helping Working Families: The Earned Income Tax Credit, one of the state’s most effective anti-poverty measures, got a big boost, and a new child and dependant care tax credit will help approximately 74,000 low-income families better afford child care.
  • Keeping Families Together: Undocumented families facing deportation will now have access to legal assistance under a new pilot program. Universal legal representation promotes due process and has been proven to result in better case outcomes.
  • Improving Transportation: After years of neglect, New Jersey Transit will receive $242 million in new funding to help restore and modernize the state’s transportation system.
  • Funding for Education: From pre-kindergarten to community college, public schools across the state received a big boost in funding.
  • Addressing Child Poverty: Cash assistance available to New Jersey’s poorest families was increased for the first time in thirty years, and more children may now qualify for TANF with the elimination of the punitive “family cap” policy.