New Jersey's New Budget Hikes Taxes on the Rich & Corporations, Offers Some Tax Breaks

New Jersey has a new $37.4 billion budget that raises taxes on the very wealthy and some businesses. It also provides some new and expanded tax breaks and increases spending on schools and mass transit.

Gov. Phil Murphy and the Democrat-led Legislature reached an agreement on the spending plan just hours before a midnight deadline Saturday. Murphy signed the legislation late Sunday night.

The deal raises income taxes on those making more than $5 million. It also hikes taxes on businesses earning over $1 million.

Income-tax filers who itemize deductions will now be able to deduct up to $15,000 in property taxes instead of just $10,000. The budget also increases the earned income tax credit for low-income filers.

WNYC's Nancy Solomon told All Things Considered host Jami Floyd the tax changes will defray the effects of school spending freezes, a major concern for many residents.

"Suburban towns live and die on the quality of their schools, because it's what attracts people to move to the town in the first place.  That drives up property values, and driving up property values then brings in more property tax revenue to pay for the schools," Solomon said.