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TRENTON — New Jersey Democratic Gov. Phil Murphy signed a $56.6 billion budget just before midnight Friday. The budget calls for tax increases on high-revenue businesses to support the state’s transportation authority, while spending billions on education and other programs.

The Democratic-led House, which passed the budget hours before Murphy signed it, and the governor were two days ahead of the constitutional deadline to pass a balanced budget and avoid a government shutdown.

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

For taxpayers, the budget includes billions of dollars for primary and secondary education, property tax relief, state pensions and a number of other programs. For companies with annual revenues of more than $10 million, the budget includes a tax increase that raises the top tax rate for these companies from 9% to 11.5%.

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Murphy, also a Democrat, proposed a so-called corporate transit fee to help struggling New Jersey Transit, which could face a budget shortfall next year. The agency, which operates buses and trains in the state, has been borrowing capital for years to fund its operating budget.

Murphy had promised to find a way to provide funding to the agency. It’s unclear to what extent the tax increase fully achieves that goal. That’s in part because lawmakers would have to provide the funds in subsequent fiscal years, a commitment that could prove difficult if tax revenues decline, for example.

The spending plan is about 4% higher than the budget Murphy signed last year, a slight increase from past years.

The budget also calls for an increase in state K-12 funding to fully implement an aid formula ratified by the state Supreme Court, bringing that aid to over $11 billion, an increase of nearly $1 billion.

The budget also allocates about $2.5 billion for direct property tax relief, continuing programs introduced in 2022 and 2023 to help residents, renters and seniors. The average property tax bill in 2022, based on the most recent information available, is about $9,500, according to state data.

The budget funds all aspects of state government, from executive departments to public universities. Lawmakers this year approved a 67% pay raise for lawmakers, the first since 2002, that takes effect in 2026. The budget includes a number of spending items sometimes called Christmas tree items because they are seen as gifts to specific groups of voters. They include funds to combat homelessness, help people reintegrate into society after prison, fire departments, arts programs and a city effort to teach life skills through tennis.

The budget is Murphy’s penultimate before next year’s gubernatorial election, as the incumbent, who already has two terms to serve, faces term limits.

Since taking office in 2018, Murphy and the Democratic-led legislature, succeeding Republican Chris Christie, have transformed the state’s finances. Together, they have pumped billions into K-12 education, which has been largely stagnant for eight years, increased payments to a long-sluggish public pension system and bolstered the state’s emergency fund.

Murphy and lawmakers have also raised taxes, including on those earning more than $1 million a year. They also briefly raised corporate taxes, but the surcharge was allowed to expire this year.

The new budget reintroduces this tax – but only for companies with sales of over $10 million.

Republicans, who are in the minority in the state government, and business groups condemned the higher taxes, saying they did not stimulate economic growth and did not punish companies that behaved as responsible members of the economy.

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