The month is more than half over, and it appears New Jersey Gov. Phil Murphy and lawmakers in his own party are no closer to coming up with a budget plan they can agree upon to avoid a July 1 government shutdown.
Talk of a shutdown grew stronger Friday, when talks about the budget between Murphy, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin completely broke down, according to a report in NJ.com.
Murphy’s spending plan calls for more than $1.5 billion in new taxes, including a hike in the state sales tax, a tax on online purchases, taxes on ride- and home-sharing services, and a millionaires tax. The governor also wants to legalize recreational marijuana use and tax it. The money will be used to increase pension payments and school aid, assist NJ Transit, and implement new programs, such as state-provided pre-kindergarten services and free community college to low-income students.
But legislative leaders are opposing the sales tax hike and millionaires tax, fearing a backlash from tax-weary voters who already bear one of the highest tax burdens in the nation. Sweeney warns the millionaires tax would drive high-wage earners from the state, and has instead proposed a short-term plan to tax corporations—a plan Murphy rejects as a temporary solution to long-term problems.
After Friday’s failure to reach a compromise, Sweeney said the legislature would move forward with its own budget plan. If passed, Murphy would then have to decide whether or not to approve it.
Murphy contends that his election gives him a mandate from voters to fix state finances. But some political watchers say the Democrat’s election was more a reflection of voters’ strong feelings against former Republican Gov. Chris Christie than an embrace of Murphy’s progressive agenda. Murphy’s critics also complain that talk of the perilous state of New Jersey’s finances isn’t preventing the governor from seeking to institute and expand expensive programs, such as universal pre-kindergarten and his push to someday offer free community college to all.
If there is a shutdown, Murphy will be in the position of trying to sell voters on the need to raise taxes in a state where high taxes is a perennial complaint.
And the tax issue won’t go away in July, as it appears likely the state gas tax, which lawmakers hiked 23 cents per gallon in 2016, will be increased again in the fall to meet state funding needs.
Quote of the day: “Cordial meeting. But we are far apart.” – An unnamed government official on budget talks between Murphy and legislative leaders.
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