PISCATAWAY — Gov. Phil Murphy proposed a $40.1 billion revised 2021 budget Tuesday morning at Rutgers University’s SHI Stadium that relies on $4 billion in borrowing, $1 billion in new taxes and other revenues, and $1.25 billion in spending reductions and other savings.

The revised budget was needed because the coronavirus caused a $1.4 billion loss of revenues in fiscal year 2020 and a projected loss of $5.6 billion in fiscal year 2021 due to business closures and slowdowns, according to the administration.

Some businesses, such as gyms and movie theaters, remain closed; others, like restaurants, are operating under severe restrictions. Murphy has still not allowed indoor dining to resume, despite surrounding states having allowed it.

“The COVID-19 pandemic has both devastated our state’s finances and highlighted the importance of the progress New Jersey has made over the past two years,” said Murphy. “Our focus remains squarely on making the essential investments we need to make to ensure our residents, businesses and institutions don’t merely defeat this pandemic, but thrive once it is over.”

Business and Republican leaders called Murphy’s plan to continue to increase spending during a pandemic “irresponsible.”

“This budget simply does not reflect the stark reality of our times. Instead of keeping expenses low for our taxpayers, Gov. Murphy is raising taxes to make New Jersey businesses less competitive,” according to a statement from the New Jersey Business and Industry Association. “Instead of holding the line on spending, Gov. Murphy has proposed spending $1.4 billion or 3.6% more than the prior year and $5.4 billion or 15.6% more than the budget three years ago before he took office.”

Murphy’s fiscal 2021 budget would find new revenue by expanding the state’s “millionaire’s tax,” undoing the exemption and cap on yacht and boat taxes, increasing the cigarette tax, restoring the sales tax on limousine services and other moves.

NJ Transit’s allocation will fall 15% to a total of $386 million, but the agency has received about $1 billion in federal COVID-19 aid, officials have said.

Murphy’s budget also protects some programs. It reinstates the Senior Freeze and Homestead Rebate property tax relief programs, keeps K-12 school aid at 2020 levels and increases payments to state worker pensions.

School aid and help for renters and landlords were two issues important to Pastor Amir Khan of New Beginnings Church in Camden. He was invited to the speech as a supporter of Murphy and said he often helps unemployed people who can’t pay their rent.

Imam Umar Salahuddin, of Atlantic City, said he appreciated all the programs Murphy had saved from cuts, and agreed it’s important to keep a strong balance in surplus in case of further emergencies.

But Republicans want structural changes to bring spending under control.

“We’re in a financial crisis ... and the governor proposes eight new taxes,” said Republican Assembly Leader Jon M. Bramnick, R-Morris, Somerset, Union. “We’re going to need a wall around New Jersey to keep people in.”

Bramnick also criticized the idea of borrowing $4 billion and putting $2.2 billion into surplus, only to pay interest on it.

Instead, he said, the governor should make structural changes to address the state’s indebtedness, put a 2% cap on annual state budget increases like other levels of government must live with and put people back to work by opening up businesses still restricted by COVID-19.

Murphy had proposed a $40.9 million fiscal 2021 budget in February, and under the normal course of business the Legislature would have worked with it to develop and pass a budget for the fiscal year starting July 1. Because of the pandemic, Murphy extended fiscal 2020 for three months, with a $7.6 billion spending plan, beyond the traditional closing date of June 30.

“Besides setting off an unprecedented public health crisis, COVID-19 unleashed an economic crisis that can only be rivaled by two other times in our state’s entire 244-year history — the Great Depression and the Civil War,” according to the Fiscal Year 2021 Revised Budget Proposal.

State Treasurer Elizabeth Maher Muoio said the current crisis has also had a disproportionate impact on lower-wage workers and communities of color, and the economic crisis is not showing signs of abating any time soon.

“We are not expecting the sales tax to be back to pre-COVID levels anytime in fiscal years 20-21,” she said.

Murphy had signed legislation authorizing the state to borrow up to $9.9 billion, but revenue expectations will only allow $4 billion in borrowing, officials said. Murphy has also advocated for more federal aid, and more flexibility in how the state can spend the $2.4 billion in federal CARES Act funding it has received.

The governor’s budget now goes to the Legislature for potential changes and passage by Oct. 1. Bramnick said he hopes state Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, and Assembly Speaker Craig Coughlin, D-Middlesex, will resist Murphy’s increased spending and taxes.