NJ Spotlight: As State Coffers Swell, Murphy Administration Releases Frozen Funds - Garden State Initiative

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NJ Spotlight: As State Coffers Swell, Murphy Administration Releases Frozen Funds

January 17, 2020

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by John Reitmeyer

State tax collections increased by more than 7% during the first half of the fiscal year, a surge that allows for the release of all remaining spending items impounded by Gov. Phil Murphy several months ago during a budget dispute with lawmakers, his administration said.

The positive news about fiscal year 2020 revenues and the new information about the release of dozens of appropriations that had been locked in reserve by the governor over loud objections from lawmakers were announced at the same time Thursday afternoon by the Department of Treasury.

Treasury’s action seemingly resolves concerns about the stability of the current budget that Murphy first raised in late June as lawmakers approved an appropriations bill that increased projected spending, but balked at a tax on the wealthy sought by the governor.

A total of $121 million in reserved spending was released on Thursday after an initial $114 million had been cleared by Treasury in October.

The state’s improved revenue outlook — year-to-date tax collections are up by nearly $1 billion over last year — is good news on the budget front. But it could end up undercutting Murphy in his continuing call for lawmakers to enact a surcharge on the wealthy.

The governor, a first-term Democrat, announced earlier this week in his State of the State address that he still wants a true millionaires tax. But it may now be harder for him to sell it to tax-sensitive lawmakers since current tax rates are generating a healthy surplus on their own.

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