TRENTON, N.J. – The Assembly Budget Committee passed a bill Monday that would allow at least $14 billion in borrowing to replace revenue lost during the economic shutdown in response to Covid-19.
Republicans on the committee asked that taxpayers get a chance to weigh in, if there was a back-up plan when borrowing for revenue is struck down as unconstitutional, and if the administration would consider an alternative plan that provides much needed revenue while cutting taxes for the middle class.
“New Jerseyans are smart,” said Assemblyman Hal Wirths (R-Sussex), the Republican budget officer. “Why can’t we ask the voters for approval to make sure it’s done properly?”
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When Assemblyman Rob Clifton asked if there was a game plan for when the court reaffirms the precedent that borrowing can’t be used as revenue, state Treasurer Elizabeth Maher Muoio said they would have to look at more cuts – indicating the administration hasn’t thought ahead.
“I know there will be massive cuts,” said Clifton (R-Monmouth). “But has it been gamed out of how to deal with this if the courts rule like they ruled in 2004.”
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Assemblywoman Serena DiMaso offered an alternative plan providing a tax cut for the middle-class and a revenue boost for the state budget by keeping what New Jersey pays in federal income tax. Similar to the reciprocal tax agreement with Pennsylvania, it would allow taxpayers up to a certain income to only file taxes to the state at federal rates.
“It seems to me that it would be a better plan,” said DiMaso (R-Monmouth). “We are all talking about tax cuts. We are all saying we don’t want to raise taxes.”
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