THE LATEST: Murphy offer of $250M in N.J. property tax relief if the gov gets his millionaires tax is flatly rejected by top Dem. ‘Stop the gimmicks,' Sweeney says.

Gov. Phil Murphy announced Monday that an unexpected surge in tax collections means New Jersey will be able to offer an additional $250 million in property tax relief to residents next year — but only if the state Legislature agrees to hike taxes on millionaires.

The announcement adds a twist to state budget negotiations between the Democratic governor and Democratic-controlled Legislature that will begin in earnest in the coming weeks.

It also amounts to a reversal of fortunes, of sorts, for the state, which was at risk of a shortfall this year.

Murphy said Monday night at a town hall at a Ewing firehouse that the state had seen an unanticipated increase in tax collections that will also give his administration more money to work with next fiscal year.

He said the new money would go right into “direct middle-class property tax relief," but only if the state budget scheduled to begin July 1 is infused with the $447 million he expects to generate by taxing gross income on $1 million or more at $10.75 percent.

Without a millionaires tax, his office said, Murphy would need the $250 million in unexpected tax collections to go toward filling that hole in the budget.

Property taxes in New Jersey are the highest in the nation and often a major concern for residents. The state’s average property tax bill hit $8,767 last year, a new record high.

Murphy’s current budget proposal includes $283 million for the Homestead property tax credit program and $202 million for Senior Freeze.

His office said the governor would pour the additional $250 million into those popular programs.

Murphy’s administration is hoping the promise of more property tax relief will help win support within the Legislature, where Democratic leaders have voiced strong opposition to the millionaires tax.

Legislative Democrats blocked Murphy’s efforts to install a millionaires tax last year and instead raised the marginal tax rate on income over $5 million to 10.75 percent.

Murphy’s second proposed budget once again seeks to raise taxes on income over $1 million. He says the state needs the extra revenue to increase spending on transit, education and public-worker pensions.

The governor and lawmakers have less than two months to come to an agreement. Under the state constitution, the Legislature must pass a budget and Murphy must sign it into law by July 1. Otherwise, Murphy could shut down parts of state government.

Murphy, who is a more progressive Democrat than legislative leaders, entered the town hall Monday night to a crowd chanting “Millionaires tax! Millionaires tax!”

The governor told the audience the expected uptick in tax revenue was a “pleasant surprise” and that his property tax relief plan “sweetens the pot” on the millionaires tax.

Murphy said he’s not “playing class warfare." He’s simply asking millionaires to pay their fare share.

“We have to grow the pie and make sure everybody gets a piece of the pie,” the governor told the crowd.

Today, at our town hall in Ewing, I shared some good news: State revenue collections are running more than $250 million over our budget projections.



Proud to announce that we will work to invest this revenue in property tax relief for our middle-class families and seniors. — Governor Phil Murphy (@GovMurphy) May 6, 2019

Brent Johnson may be reached at bjohnson@njadvancemedia.com. Follow him on Twitter @johnsb01.

Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter@samanthamarcus. Find NJ.com Politics on Facebook.

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