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Sarlo: Sales tax hike 'off table'

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He didn't quite say, “Read my lips, no new taxes.”

But Senate Budget Committee Chair Paul Sarlo, D-36th District, came close in remarks to reporters following a Tuesday committee hearing and said Gov. Phil Murphy’s push for a sales tax increase is now “off the table.”

The Democratic governor has proposed $1.5 billion in tax hikes, including bumping the sales tax back up to 7 percent from the current 6.625 percent.  The state sales tax was previously lowered in exchange for passage of a 23-cent gas tax for the Transportation Trust Fund.

The remarks followed closely two modestly downbeat pieces of news out of Trenton: State income tax receipts were off $23.1 million, or 1 percent, at $2.3 billion in fiscal 2017, and consensus estimates suggest newly legalized sports-betting industry may produce upward of $20 million or so in new state revenue – a bit less than some had imagined.

“We’re not going to have the windfall that we’re all hoping for based upon the ruling,” Sarlo acknowledged. “But I still think you will see something in the $20 and $30 million range.”

Murphy also has proposed taxes on millionaires, Uber, Lyft, Airbnb and recreational marijuana, assuming it’s legalized in New Jersey before the end of the 2018 fiscal year on June 30. “I want to reiterate taxes should be a last resort,” Sarlo said.

But New Jersey does need more revenue, he added.

“If you do no new programs and just factor in the cost of living adjustments and the increase in running the state government, keeping the surplus the same as last year, it’s about a $160 million shortfall,” Sarlo said.

Meantime, Murphy’s policy wish list has included public preschool, free county college, more college financial aid and large-scale improvements to NJ Transit. "I am sure there's some new revenue you can find," Sarlo said.

He scoffed at the idea state government would enter a shutdown for a second consecutive year due to a possible budgetary impasse.

“We are not going to shut the government down, as much as people would love to see Democrats in the legislature and the government shut government down,” Sarlo said.

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Daniel J. Munoz

Daniel J. Munoz


Daniel Munoz covers politics and state government for NJBIZ. You can contact him at dmunoz@njbiz.com.

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