Lawmakers pass budget deal brokered with Gov. Murphy

New Jersey Gov. Phil Murphy announced Wednesday the state will sweeten its research and development tax credit for cutting-edge companies doing research in New Jersey. (Julio Cortez/AP Photo)

New Jersey Gov. Phil Murphy announced Wednesday the state will sweeten its research and development tax credit for cutting-edge companies doing research in New Jersey. (Julio Cortez/AP Photo)

New Jersey lawmakers on Sunday signed off on a $37.4 billion budget package brokered at the last minute with Democratic Gov. Phil Murphy to avoid a second straight state government shutdown.

The Democratic-led Assembly and Senate passed the deal about 24 hours after Murphy, Assembly Speaker Craig Coughlin and Senate President Steve Sweeney announced the agreement that raises taxes on the wealthy and some businesses.

It awaits Murphy’s signature. Murphy on Saturday said that state government would not be closing down after he and leaders reached the deal, hours ahead of a midnight deadline to avoid a government shutdown.

“I’m happy it’s over,” Sweeney said after a nearly 12-hour session. “I’m hoping that we can now move forward on a path where we all realize that we can’t get anything done without each other. It was not a fun process. It doesn’t have to be this way.”

The agreement was reached after much wrangling among the state’s all-Democratic leadership that largely left the state Legislature’s Republican minority out of talks.

“Who was at the table representing business or the taxpayer during the negotiations?” Assembly Minority Leader Jon Bramnick said. “The Murphy message is clear: More taxes.”

The deal finances spending increases that go toward school aid, transit and the public pension by raising taxes on people making $5 million and above from 8.97 percent to 10.75 percent. It also raises business taxes on companies making more than $1 million by an average of 2 percent over four years.

There will be no broad sales tax increase as part of the agreement as Murphy was seeking a hike from 6.625 percent to 7 percent.

Murphy and Democrats praised the deal as delivering on liberal promises such as increased K-12 education spending and a roughly $240 million boost in state subsidy to New Jersey Transit, nearly triple what Murphy predecessor Republican Gov. Chris Christie allotted in his final budget.

Murphy also said the deal includes an increased state tax deduction from $10,000 to $15,000 for property taxes, as well as the restoration of a property tax rebate program.

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