With three months remaining for Gov. Phil Murphy and the Legislature to salvage the state’s 2021 budget plan, which has been rendered obsolete by the coronavirus pandemic, a progressive group has started its push for tax hikes rather than spending cuts.

New Jersey Policy Perspective, a think tank whose ideas often catch the attention of the governor, issued a report Tuesday saying that the COVID-19 crisis proves the state needs to raise taxes to provide the health and safety-net services required by residents.

Sheila Reynertson, a senior policy analyst for NJPP, said the proposals mostly affect corporations and the wealthiest 15% of families – higher taxes on income over $250,000, reinstating the estate tax, extending a business tax surcharge and restoring the sales tax to 7% and applying it to some high-end services.

“We’re really talking about targeted tax reform on those who have disproportionately benefited in the last 20, 40 years,” Reynertson said.

“This crisis offers us an opportunity to pause, take a step back and reconsider who is benefiting from New Jersey’s current tax code and who is being left behind,” she said.

NJPP says the budget can’t be balanced with spending cuts because many departments haven’t even recovered funds and staffing from the Great Recession – and a recession is when people need more services, not fewer.

“We can’t revert to old habits of deep cuts and just simply waiting out the storm,” Reynerston said. “It’s quite clear that New Jersey has to take a bold stance and find new reliable sources of revenue to again avoid cutting vital services at the time that they’re needed the most.”

Murphy had proposed a $40.85 billion budget, but it will have to be significantly reworked. He said he talked Tuesday with legislative leaders about the budget but didn’t publicly divulge the specifics of what they discussed.

Though state officials have just three months to come up with a plan, during an unfolding health crisis, Reynertson says the state needs more than a status quo, maintenance budget.

“The immediate problem is that we don’t have the ability to cut services and cut the programs that are desperately needed by New Jersey families facing this incredibly unstable future,” she said.

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