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Murphy Proposes $1,000 Baby Bonds, Millionaire's Tax In Pandemic Budget
By
Nancy Solomon
Published Aug 25, 2020
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NJ Governor's Office / Flickr
By
Nancy Solomon
Published Aug 25, 2020
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With more than 1.4 million unemployed, a looming foreclosure crisis, and schools struggling to teach during a pandemic, New Jersey Governor Phil Murphy took a page from Franklin D. Roosevelt: Borrow and spend to stimulate an economy in free-fall from the COVID-19 pandemic.
"So, we are in a moment unlike any other. A moment from which we cannot shrink. A moment that demands that the scope of our actions meets the size of our challenges," Murphy said during his second budget address of the year on Tuesday.
His original proposal in February was tossed out and the June 30th deadline extended until September 30th. Murphy gave the address in the empty football stadium at Rutgers University before state legislators and a small group of dignitaries.
He outlined increases in spending to help schools; providing more childcare; stopping evictions and foreclosures; and building a stockpile of pandemic supplies. His budget calls on the state legislature to create a "Baby Bond," an idea of Senator Cory Booker that would provide the majority of children born in 2021 a $1,000 savings bond.
Murphy is proposing families who earn up to $131,000 per year would be eligible. The child would receive the bond with interest at age 18.
"This is a place where New Jersey will lead, with the first statewide program of its kind," Murphy said. "At this time–when so many families are struggling with how they will pay their bills or seeing their hard-earned savings disappear–let’s make a better promise to the next generation of New Jerseyans."
The New Jersey Institute for Social Justice quickly released a statement supporting the proposal.
"For too long, public policies have supported asset development for well-off, predominantly white communities while excluding communities of color," the statement said. "And this proposal is an important step in promoting wealth-building for families that have previously been left out of our state's prosperity.
Murphy mentioned structural racism twice during the speech, and urged lawmakers to create a fair tax system as a pathway to a fairer society. To that end, he renewed his call for a millionaire's tax.
"Building a stronger New Jersey requires us to ask those who, in some cases, continued to prosper as this pandemic raged around us—and most certainly were hurt less—to do more so we can strengthen the middle-class families who are the backbone of our state," he said.
Murphy at SHI Stadium at Rutgers, August 25, 2020
NJ Governor's Office / Flickr
Murphy also proposes $1.2 billion in cuts across state agencies and increasing the taxes collected on sales of boats, yachts and firearms. For example, the state caps the sales tax on yachts at $20,000, which means people who buy multi-million-dollar boats pay the same as those who buy much more modest boats.
Progressive groups across New Jersey released statements in support of the governor's proposal.
On the budget address, Network President and CEO Staci Berger issued the following statement:
“Despite the state's deep fiscal challenges, Gov. Phil Murphy today showed us that establishing clear protections for renters and homeowners is strong, responsible fiscal policy," said Staci Berger, president and CEO of the Housing and Community Development Network of New Jersey.
State legislators were a bit more circumspect.
“We will work to ensure the budget that is enacted protects hard-working families and our most vulnerable while also preserving important programs to the greatest extent possible," said Assemblyman John Burzichelli, who represents several counties in south Jersey.
Murphy has wanted a millionaire’s tax since he campaigned for governor in 2017. Senate President Steve Sweeney and other Democratic leaders voted for a millionaire’s tax several times that were vetoed by then-Governor Chris Christie. But they say they now oppose it because they think it will induce millionaires to leave the state.
While many groups praised the governor for proposing a millionaire’s tax and spending to help poor and moderate income residents, they say it falls short in one key area.
"It neglects immigrants who have been excluded from state and federal pandemic relief," said Brandon McKoy, president of New Jersey Policy Perspective. "We urge state lawmakers to do more to ensure that no one is left behind in the state’s recovery, regardless of where they were born. Only then can we be sure that our recovery will be strong and long-lasting for all.”
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