All you need to know about NJ budget 2021: Who will pay more, what programs get more money

Millionaires, smokers, gun buyers and companies that don't provide their employees health insurance would face higher taxes and fees under Gov. Phil Murphy's budget proposal he announced Tuesday.

The $40.9 billion spending plan also includes funding bumps in state assistance for certain university students, NJ Transit, public pensions and lead pipe replacement, among other things.

These numbers will shift as the Legislature introduces its own budget bill this summer and the state gets a better idea of the money it collects in taxes this fiscal year. But it's a good starting point to understand where the governor thinks the state should invest for its budget covering July 2020 to June 2021. 

Here are the basics you should know.

Murphy wants to increase taxes on:

• Millionaires: Murphy continued his push to increase the marginal tax rate on income over $1 million from 8.97% to 10.75%, a fight he lost the last two years. This year the governor may have his best shot to pass this policy, which brings in almost half a million dollars. Senate President Stephen Sweeney, D-Gloucester, said he would consider the tax hike if Murphy adds another $1 billion into public pensions. 
• Cigarettes: The tax on cigarettes should be increased for the first time in a decade, Murphy said. The governor wants to change the tax from $2.70 a pack to $4.35 a pack, which would bring in an estimated $218 million in revenue. The tax bump would help fund the governor's new Office of Health Care Affordability and Transparency, anti-smoking programs and lead remediation, among other health care measures. 
• Companies with employees on Medicaid: Murphy wants to impose a corporate responsibility fee on companies that don't offer their employees affordable health care plans. Companies with 50 to 500 employees would pay $325 per person on Medicaid; companies with 500 to 1,000 employees would pay $525 per person, and companies with more than 1,000 employees would pay $725 per person. 
• Gun owners, bear hunters, opioid manufacturers: Last year, the Legislature struck out these three fees Murphy wanted to include in the budget. He's trying again this year to charge more on bear hunts, opioid manufacturers, and gun buyers and concealed carry permit holders.

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Murphy wants to give more money to:

• College scholarships: Certain university students would receive free tuition for the first two years at four-year public universities, if Murphy's plan to spend $50 million on the "Garden State Guarantee" passes. This program offers assistance to those with a family income of $65,000 or less who have exhausted all other funding options. It expands the grants to community college students, which Murphy will continue to fund with $30 million. 
• NJ Transit: The beleaguered transit authority will get a record $589.5 million from the general fund, but will continue to receive payments meant for clean energy projects ($82.1 million) and the New Jersey Turnpike Authority ($129 million.) Murphy has slammed his predecessor for diverting funds meant for other uses, while continuing to do the same. 
• Improving credit score: Murphy took steps to improve New Jersey's fiscal outlook and help convince credit rating agencies to increase the state credit score and allow it to pay lower interest on debt. He increased payments for public pensions ($4.6 billion), put aside $745 million in an account to prepare for the next recession, and proposed a $1.6 billion surplus. But the pension payment is only 80% of what New Jersey should be paying, according to experts, and the surplus is only 4% of the state budget, while the average state surplus is 10%.
• Lead: Murphy wants to set aside $80 million for lead remediation in drinking water, such as replacing lead pipes. The Legislature and Murphy are also discussing a bond issue, which would have voters approve an unspecified amount of debt New Jersey would shoulder in order to remove lead from pipes across the state. 
• Property tax relief: New Jersey will offer $1.26 billion in property tax relief through programs that keep payments down for veterans or the elderly under Murphy's proposal. 
• K-12 education: Murphy wants to give $382.2 million of state funds to pay for kindergarten through high school education and another $2.47 billion for higher education. 

Ashley Balcerzak is a reporter in the New Jersey Statehouse. For unlimited access to her work covering New Jersey’s legislature and political power structure, please subscribe or activate your digital account today.

Email: balcerzaka@northjersey.com Twitter: @abalcerzak