Murphy May Hike Taxes In New Budget, Report Says

NEW JERSEY — Some New Jersey taxpayers may face a heavier burden in the new state budget as lawmakers seek to keep revenue up with state spending, a report said.

Major tax collections in 2023 were down $529.9 million (2.8 percent) from the year before according to the Department of the Treasury, and the state's 2023 budget was the largest in state history at $54.3 billion.

Two sources told NJ.com that state officials have been discussing potential "revenue-raisers" to help fund the government, which could potentially include an increase in the state's 6.625 percent sales tax, or reimposing the corporate business tax.

The sources also said that a separate proposal could increase the state's gas tax to pay for transportation projects. The current state tax on gasoline is 42.3 cents per gallon, and 49.3 cents per gallon of diesel.

While nothing has been set in stone, this is the time of year when Gov. Phil Murphy is preparing to unveil his latest budget proposal, which will carry the Garden State through his last months in office.

The report comes as NJ Transit has proposed a 15 percent rate hike in its 2025 budget to address a $106.6 million budget gap, which would be the agency's first in almost a decade.

If approved in April, the hikes will take effect on July 1. Subsequent 3 percent increases are also proposed to take effect on July 1 of each year, officials said.

The state's corporate business tax also expired on Dec. 31, 2023, despite last-gasp efforts to pass a law to keep it intact.

Over the past year, several advocacy groups in New Jersey have called for the state to extend that tax, which they said could be used to bridge NJ Transit’s funding gap and keep more money in riders’ pockets.

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