New Jersey lawmakers appear ready to approve a new state budget this week.

It could be the one of the most unfriendly-to-business budgets in modern history. In the midst of continuing economic challenges during the pandemic, nearly all of the $1 billion tax hike included in the budget will be shouldered by the business community.

A 2.5% surcharge on corporations with more than $1 million in profits was being phased out, but a budget introduced late Monday — reflecting a deal between Gov. Phil Murphy and legislators — makes it permanent. The tax hike on millionaires, to 10.75%, could impact a significant number of small business owners depending on how they file taxes. The spending plan will also include a tax hike on HMO plans. Businesses will also be impacted by a 9.3 cent per gallon gas tax hike taking effect in October as well as increased tolls on the Turnpike, Parkway and Atlantic City Expressway.

Tom Bracken, president of the New Jersey Chamber of Commerce, told me this budget could be devastating for companies trying to survive and recover from the pandemic.

"This budget in no way reflects the reality this state is facing right now," Bracken said. “It does nothing but aggravate the situation.”

He predicted many companies would either not survive, or simply relocate to lower-tax states.

"The money being used in this budget provides no solutions to problems," Bracken said. "It actually aggravates the economic problems we already have.”

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In all, Murphy's tax hikes will generate $1 billion in revenue. That is still not enough to balance the budget. Lawmakers are borrowing another $4.5 billion, but can borrow more than double that amount under legislation authorizing nearly $10 billion in bonds. The added debt comes as the group “Truth in Accounting” cited New Jersey as the state that already had the highest per-taxpayer debt load in the nation. At over $190 billion, it amounts to nearly $58,000 of debt per taxpaying resident.

Murphy did not get everything he wanted in this budget. Politico first reported last week several smaller taxes Murphy proposed would be eliminated. That was also reflected by anonymous sources in an NJ.com report Monday, just hours before the budget was introduced. At that time, no one from the general public had yet seen the document that would go to hearings on Tuesday.

The legislature rejected tax hikes on cigarettes, guns, limo rides and boat sales, and a tax on opioid manufactures. Lawmakers also reduced the annual pension contribution by $200 million. Murphy’s plans for a so-called “Baby Bond” program was also eliminated. He wanted to give a $1,000 savings bond to every baby born in New Jersey next year.

It is still a significant political win for Murphy.  He got his long-coveted millionaires tax hike, and in exchange for it an election year tax rebate for middle class tax payers that will go out just weeks before he stands for reelection. He also managed to avoid any of the reforms in Senate President Steve Sweeney’s “Path to Progress” report that called for major changes to pension and health benefits for state workers.

However, as New Jersey begins to recover from the economic damage of Murphy’s coronavirus closure orders, nearly everyone in the state will be asked to pay more, which could further delay both the short and long-term recovery of a state that was struggling even before the pandemic hit.