Stymied by a legislature that won’t go along with his planned $1.5 billion in tax hikes, Gov. Phil Murphy on Monday vowed to cut nearly $1 billion from the alternative budget proposal approved by lawmakers in his own party.
Murphy, whose own $37.4 billion budget plan is actually about $900 million more than the legislative plan that he’s vowed to take a scalpel to, contends the Democratic legislature’s plan is fiscally unsound. He wouldn’t say what programs he would target with his promised $855 million in cuts, according to a report in NJ.com.
Even if Murphy does cut the legislature’s $36.5 billion budget, the Democratic spending plan would still be close to $1 billion over Republican Gov. Chris Christie’s 2017 budget, which was $34.7 billion.
Murphy is battling with legislative leaders, who oppose his plans to impose a millionaires tax and raise the state sales tax. Senate President Steve Sweeney and Assembly Speaker Craig Coughlin contend the plan will drive high-wage earners out of the state, while the sales tax increase will just add to what is already one of the heaviest tax burdens in the nation.
The legislature instead wants a temporary hike on corporate taxes and a tax amnesty program, a plan Murphy refuses to consider since he says it doesn’t provide a stable source of revenue.
State leaders must agree on a budget by July 1 or face the possibility of a government shutdown.
There was some talk of a possible compromise, with Murphy accepting a combination of scaled-back hikes in the corporate and millionaires’ tax plans as a way to fund his progressive agenda. Murphy’s budget calls for free community college for low-income residents, expansion of state pre-k programs, increased school funding, aid to NJ Transit and payments into the state’s belegaured pension program. Murphy contends residents would be willing to pay higher taxes if they feel they are getting good value for their money.
New Jersey leads the nation in outmigration, and residents consistently list the state’s high tax burden as one of its biggest problems. In 2016, 63 percent more people moved out of New Jersey than moved in, according to United Van Lines 40th Annual National Movers Study.
Quote of the Day: “That’s unfortunately the option that we’d be left with.” — Gov. Phil Murphy, threatening to trim the state budget by $855 million if the legislature doesn’t go along with his spending plan, which calls for $1.5 billion in new taxes.
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