In his first budget address Tuesday, Gov. Murphy proposed a tax on millionaires - one of many proposals aimed at funding investments in pensions, schools, and transit.
He also wants to increase the state's contributions to public education by about 8 percent, or $1 billion.
"On these, and on all the critical issues New Jersey faces, we have been aggressive and we plan to stay aggressive, because our state and our people deserve a government that supports their values and their futures", Murphy said.
Murphy is proposing raising the tax on incomes above $1 million from the top bracket of 8.97 percent to 10.75 percent. Assembly Democratic leaders said in a statement that they "promise" to review the proposals.
Some lawmakers have proposed decriminalizing small amounts of marijuana, but Murphy says the state needs to carefully legalize, regulate, and tax marijuana sales. The budget includes appropriations totaling $37.4 billion and a projected surplus of $743 million.
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"Legalization will allow us to reinvest directly in our communities - especially the urban neighborhoods hardest hit by the misguided War on Drugs", Murphy said.
The current sales tax is 6.625 percent. The hike is estimated to generate more than $750 million.
The Democratic governor is expected to announce an increase for the state's millionaire's tax, an idea that has angered some Republican lawmakers.
New Jersey's new Gov. They say that they don't support raising income taxes after the federal tax law passed, which limited those state and local deductions.
Senate President Steve Sweeney has proposed a surcharge on corporations that make more than a million dollars in profit in New Jersey. And he is banking on about $110 million as a result of what he called technical changes to the corporate business tax.