Murphy, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin announced the deal Saturday evening, just hours ahead of a midnight deadline.
Murphy says the deal will raise income taxes on people making $5 million and above to 10.75 percent from 8.97 percent. It will also raise business taxes by an average of 2 percentage points over four years. The current rate is 9 percent.
Murphy says the deal is "just the beginning" of moving toward a "stronger and fairer" state.
The announcement means the state's parks, beaches and Motor Vehicle Commission will remain open as the July 4 holiday approaches. Last year, Republican Gov. Chris Christie and the Democrat-controlled Legislature failed to agree on a budget and state government was shuttered for three days. It ended after photos of Christie sitting on a public beach that was closed because of the shutdown created a national stir.
"Today the era of budget gimmicks is ending and the era of a stronger and fairer New Jersey for every family is just beginning," Murphy said.
There will be no broad sales tax increase as part of the deal, though that tax will be levied on e-cigarettes and lodgings like Airbnb. But the agreement doesn't include a tax hike on rental properties at the shore or real estate transactions, proposals that were considered earlier this week.
The clash over raising taxes got heated at times, with Murphy and Sweeney comparing one another to Republican Chris Christie, who left office this year.
But the Democrats seemed to put that behind them. Sweeney called it "one hell of a journey."
"We're well beyond that," he added.
(Some information from the Associated Press)
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