NJ Politics Digest: NJ Avoids Budget Shutdown, But New Taxes Might Await Most

Some plastic bags in a supermarket. (Photo: Kevork Djansezian/Getty Images)

Some plastic bags in a supermarket. Kavork Djansezian

The Democratic legislature and Gov. Phil Murphy reached a budget agreement over the weekend that avoided a state shutdown.

And while the news out of that deal was that millionaires and corporations will be paying more and Murphy abandoned plans to hike the sales tax, there is still reason for regular New Jersey residents to be concerned.

The budget deal also raises taxes on ride- and home-sharing services, and on e-cigarettes and other tobacco products. And the budget also includes $23 million in revenue from a shopping bag tax that the legislature passed and Murphy has yet to say whether or not he’ll sign.

That measure, ostensibly meant to protect the environment, would require shoppers to pay a 5-cent fee for each plastic or paper bag they receive at check-out. A penny of that money would go to shop keepers, but 4-cents would go to the state. And while the legislation called for the cash to be used to support lead-abatement programs, a provision allows the money to be diverted to the general fund.

Supporters say the legislation will prevent more plastic from being released into the environment, But Democratic supporters of the measure also tacked the tax onto paper bags, too, giving shoppers no environmentally-safe and tax-free way to avoid paying if they don’t bring their own reusable shopping bags. If Murphy, who stands to see a bag-tax backlash from tax-weary residents similar to the toilet paper tax anger experienced by former Gov. James Florio, declines to sign the measure, it means he will have to find some other way to plug a $23 million hole in the budget.

Murphy is also facing questions about his future effectiveness as governor. The budget agreement includes one-shot and short-term revenue gimmicks—fiscal moves Murphy had originally said he wouldn’t support. Now the question is whether or not the governor emerges from this battle able to fight again to advance his agenda, or is stymied before he even has a chance to get started.

Quote of the Day: “They have circled the wagons. I don’t think that bodes well for how effective Murphy is going to be at governing.” — Brigid Harrison, professor of political science and law at Montclair State University, on the Democratic legislature’s approach to dealing with the governor.

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NJ Politics Digest: NJ Avoids Budget Shutdown, But New Taxes Might Await Most