Sweeney: Millionaires Tax and Legal Marijuana Coming

The New Jersey Senate president pledges action on two of Governor-elect Murphy's top campaign promises.

Stephen Sweeney. Jeff Zelevansky/Getty Images

Senate President Steve Sweeney said he will move quickly to pass a millionaires tax when the new Legislature returns in January, setting up Governor-elect Phil Murphy for an early victory on one of his policy priorities.

Sweeney (D-Gloucester) also said to expect a renewed push to legalize and tax recreational marijuana, saying in a tweet on Thursday that the state’s current approach to marijuana is “outdated.”

Increasing taxes on the wealthy and legalizing marijuana were major planks of Murphy’s campaign. Each proposal could generate hundreds of millions of dollars to help pay for Murphy’s many policy promises, including more funding for schools, public worker pensions and other liberal priorities.

“The millionaires tax, that’s been a promise that I made, and I put that out because I actually said that seven months ago, that was one of the first things we’re going to do,” Sweeney said in his office Thursday after Senate Democrats re-elected him as Senate president. “In order to get to fully funding our school funding formula, the millionaires tax has to be part of it.”

Sweeney said the new income tax could generate $650 million, money that would go toward increased state aid for underfunded school districts. Murphy’s campaign estimated the state could raise $600 million by enacting a millionaires tax, which Gov. Chris Christie vetoed five times over the years when it was proposed in one form or another by Democratic lawmakers.

Under the most recent version of that plan, the marginal tax rate on income above $1 million would rise from 8.97 percent to 10.75 percent.

On the legal weed front, there’s already a bill, sponsored by state Sen. Nick Scutari (D-Union), that would allow New Jersey residents 21 and over to posses up to 1 ounce of marijuana, 16 ounces of infused solid products, or 72 ounces of liquid products. The tax rate on the drug would start at 7 percent until gradually reaching 25 percent over five years.

Murphy’s campaign has said it could raise $300 million by taxing legal weed. New Jersey United for Marijuana Reform, a group that lobbies for relaxing marijuana laws, estimates pot sales would bring in $60 million the first year and $300 million starting in the third year under their proposed tax rates.

“There’s a host of bills that we’re looking to get done,” Sweeney said. “Hopefully soon, in fact, we’re going to reach out to Phil because we’d like to plot out what his vision is for his first 100 days and how we can work together to get things done.”

In a separate interview with Observer on Wednesday, Sweeney also mentioned increasing the minimum wage to $15, “expanding paid family leave,” restoring funding Christie cut for women’s health care.

“We have pay equity, we have sick leave,” Sweeney said. “That’s just a few of the issues that I think we’re going to focus on.”

Murphy also wants to a close a tax loophole that allows corporations to shift profits made in New Jersey to lower-taxed states, something his campaign said could raise $290 million in revenue. Sweeney said he was open to that and another Murphy proposal — free community college — but cautioned that he first wants to understand “how they’re going to work and how we’re going to pay for them.”

“I agreed on the millionaires tax. I agree on the taxation of marijuana. And we’ll look at other ideas, but we’re not going to be aggressive raising taxes,” Sweeney said.

Murphy was also in Trenton on Thursday, meeting with Christie to discuss his transition to power. He spoke to reporters for less than a minute, saying he had a “terrific meeting” about “transition stuff” and was going to “check out the new digs” before hopping in a black SUV.

Sweeney was fresh of his 18-point victory over his Republican Senate challenger, Fran Grenier, who was backed by the powerful New Jersey Education Association and a multimillion-dollar campaign.

Sweeney was not exactly in a forgiving mood on Thursday, describing the union’s leadership with words like “thug” and “bully” and accusing them of trying to “intimidate the Legislature.” He said he had no need for the NJEA anymore because “there’s another teachers union in the state of New Jersey,”  the American Federation of Teachers. The AFT, though, only represents Newark and a comparatively small number of other school districts in New Jersey, which otherwise is NJEA territory.

“I’ll be working with the AFT. I’m very happy to work with them. They’re a progressive group that says what they mean and they don’t change,” he said.

Meanwhile, Republicans re-elected Sen. Tom Kean Jr. and Assemblyman Jon Bramnick, both (R-Union), to their leadership positions in the Legislature. The state GOP lost the governor’s office, a Senate seat and two Assembly seats on Tuesday.

“We have no intention of being the party of ‘no,'” Kean said during a news conference, offering to work together with Democrats on raising the minimum wage in exchange for reducing the income tax on the middle class.

Sweeney: Millionaires Tax and Legal Marijuana Coming