Record-setting New Jersey budget raises taxes on corporations to help transit system

New Jersey Gov. Phil Murphy (D) signed into law the state's largest budget package, at $56.6 billion, boosting the tax rates for the richest corporations .

The budget will increase the tax rate from 9% to 11.5% on corporations making more than $10 million a year in revenue. Called the corporate transit fee, this money will go toward the NJ Transit system, which is staring down the barrel of their own budget difficulties. The system operates the trains and busses in the state.

“With this budget, we are going to make life more affordable for more families. We are going to create new economic opportunities for our workers and local businesses. And we are going to invest in the potential of every one of our neighbors,” Murphy said in a statement.

“The fee will make our public transit system more reliable, more dependable, and more accessible for working New Jerseyans,” Murphy said.

Originally, the legislature was considering a state sales tax hike — from 6.625% to 7% — but later disregarded that move in favor of the transit fee. NJ Transit recently upped fares 15%, which lawmakers criticized since budget negotiations discussing this corporate transit fee were still ongoing.

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Also included in this budget is billions for K-12 education, about $2.5 billion in property tax relief, and a 67% pay raise for lawmakers, which will go into effect in 2026. Current pay is $49,000, and this bill would raise that to $89,000.

This budget is not the first time Murphy has raised taxes since taking office in 2018. In a previous budget, he raised taxes on those making over $1 million. This is also not the first time during Murphy's tenure that the budget has broken records — every budget in recent years has been the highest ever. This one is about 4% higher than the current budget.