Gov. Mikie Sherrill (D-NJ) unveiled on Tuesday her budget proposal for New Jersey, aimed at closing the state’s deficit by closing corporate tax “loopholes,” among other policy changes.
The governor, sworn in at the beginning of the year, told the legislature she was not looking to raise taxes on individual New Jerseyans in her $60.7 billion inaugural budget plan. But she is seeking to raise revenue by reducing tax breaks for larger businesses and by reducing eligibility for a senior property tax relief program called Stay NJ. Making changes to Stay NJ that would place a $250,000 cap on household income, down from $500,000, will save taxpayers “hundreds of millions of dollars a year,” Sherrill said during a speech to lawmakers touting her “affordability budget.”
Sherrill said over $700 million in new revenue would come “from closing corporate tax loopholes.” That includes targeting a provision companies often use to deduct past losses to reduce taxes. The governor is looking to limit the cap on how much large corporations can deduct, a measure that she said would raise nearly $500 million a year. Another targeted change involves new restrictions on the alternative business calculation deduction, which is meant to help small businesses. Sherrill is limiting eligibility to businesses that make under $1 million to bring in another $120 million in revenue, a move she said would keep larger companies from exploiting the tax break.
Another major policy proposal involves requiring companies with 50 or more employees on Medicaid to cover their healthcare or else face a fine. That change will raise $145 million annually, according to Sherrill. In addition, the governor’s proposal would, on net, cut about $110.3 million in aid to universities and the students that attend them, according to the New Jersey Monitor, which said Sherrill’s plan marked a roughly $1.7 billion structural deficit, though the state holds over $7 billion in rainy day reserves.
Sherrill repeatedly attacked the Trump administration on affordability during her speech, accusing Washington of making cuts to programs, particularly Medicaid, that have undermined New Jersey’s fiscal health.
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“Trump’s massive cuts are blowing an immediate hole in our budget, hurting New Jerseyans,” she said. “We’re facing a perfect storm of fiscal challenges; short-term and long-term, federal and state. The Trump Administration is recklessly slashing critical programs — from healthcare and housing, to food aid and foster care, schools, and infrastructure.”
Overall, the governor’s plan includes about $2 billion in targeted cuts and comes as the state faces a $3 billion budget deficit.
