(The Center Square) – The coronavirus outbreak is forcing New Jersey leaders to respond to new fiscal challenges, such as changing the state budget.
"Governor Murphy’s February budget proposal, along with what all of us thought about our future just 10 days ago, have been rendered obsolete by COVID-19," Regina M. Egea, president of the Garden State Initiative, told the Center Square. "The Governor and legislative leaders will have to grapple with a new fiscal reality that has yet to fully emerge."
Gov. Phil Murphy recently told NJ101.5 that although he is working with lawmakers to lessen the virus's economic impact, particularly felt by small businesses, he is seeking federal assistance as well.
"I heard Gov. (Andrew) Cuomo say that New York state could never possibly hope to have the resources that would be needed to compensate the business community for the impact of this,” Murphy told NJ101.5. “And so New Jersey is certainly no different than that.”
One reason why federal assistance is necessary is many people are losing their jobs and spending less due to the virus, which will hurt the state's tax revenue.
"Our public leaders must confront one assured consequence: a sharp decline in tax revenues," Egea told The Center Square. "The present crisis, distinctly different from our more recent economic shocks like Superstorm Sandy, requires us to work collaboratively to create a more hospitable business environment so we can re-open shuttered operations, return our residents to work and build an even stronger economy than before COVID-19."
COVID-19 stands for coronavirus disease 2019, which is caused by the new SARS-CoV-2 virus.
On March 14, the House of Representatives passed a $1 billion bill that would provide food assistance, extended sick leave benefits, and free virus testing. The Senate passed the measure on March 18, and it was quickly signed by President Donald Trump on the same day. Now, Congress is focusing its efforts on an even bigger relief package that would provide relief to certain industries such as airlines and small businesses.
As of March 14, Murphy was unsure how he would change his state budget, but he had no intention of abandoning his plan to raise income taxes for those who earn over $1 million to 10.75 percent, a 1.78 percent increase.
“Any amount of recurring revenues is a good thing, so the millionaires tax is a good example of that,” Murphy told NJ101.5.