NJ Gov. Phil Murphy Vows Veto of Budget, And Wants Tax Hikes

New Jersey Gov. Phil Murphy, a Democrat, has vowed to veto the budget proposed by his own party, increasing the possibility of a government shutdown.

Murphy strongly suggested that he won't approve any budget without approving his own priorities, including a so-called millionaire's tax and an increase in the sales tax.

During a press conference on Monday, Murphy pledged to veto the budget proposal being pushed by the Democratic-controlled state Legislature, citing the plan’s reliance on temporary one-shot and “two-shot” sources of revenue, "unverifiable" savings, and a projected year-end budget deficit.

“Should the Legislature send me this budget proposal, let me be perfectly clear: I will veto it,” said Murphy. “When you build a financial house of cards year after year, and see it fall year after year, at some point you have to realize that the same old way of doing business in Trenton isn’t working.

Murphy sad he's put forward a budget backed-up by "sound and sustainable revenues" from an increase in the income tax on residents with taxable incomes of over $1 million, closing corporate tax loopholes that benefit multi-state companies and restoring the state sales tax to 7 percent.

Talks between the Murphy administration and Democratic lawmakers have reportedly broken down at times, largely because of disputes over school funding and taxes.

In a statement, Senate President Steve Sweeney and other lawmakers pledged this past weekend to restore state support for an array of services and programs that address the needs of the "most vulnerable, aid those experiencing hardship and expand opportunity for the disadvantaged."

These Democratic priorities, lawmakers said, were funded in the current budget after a "determined fight" last year with then-Gov. Chris Christie, a Republican. But they claim they were cut out of the spending plan submitted by Murphy.

“These investments were cut out of the governor’s proposed budget,” said Sweeney. “They embody New Jersey values and if you cut them out, you change the shape of New Jersey. You make it less than it was. That’s not what we were elected to do. We should not be debating about our values, about what defines each of us as New Jersey residents.”

The budget restorations include funding for court-appointed special advocates who work with abused and neglected children, direct support professionals who aid those with physical and intellectual disabilities, Hispanic women’s resource centers that provide counseling, health-care and job-training for women and families, cancer research, re-entry programs to reduce recidivism, autism and behavioral health care assistance, and help for the homeless, according to the lawmakers.

Sweeney also said the Democratic Legislature will insist on providing increased state aid to underfunded school districts.

Murphy and Sweeney have clashed on school funding, with both sides saying their plans could lead to higher property taxes for a number of school districts. Read more: 188 School Districts May Have To Raise Taxes To Stop NJ Shutdown

“The budget is not just a balance sheet, it impacts the lives of the people in very direct ways,” said Sen. M. Teresa Ruiz, D-Essex. “At the same time that we invest in our future we also must care for the disadvantaged and those suffering from neglect. Supporting social services, respecting and defending the elderly, protecting vulnerable children and adults, providing services that raise people out of poverty and addiction are a part of the Democratic Party tradition.”

Assembly Republican Leader Jon Bramnick responded with Assemblyman John DiMaio, the Republican budget officer, at a press conference outlining Assembly Republican budget priorities.

“Only in Trenton do you see a shutdown in government because the Democrats cannot decide which taxes to raise,” said Bramnick, R-Union. “They are shutting down government because this governor is not communicating with the Democratic or Republican leadership. This is not a dictatorship. With all due respect to the governor, his inexperience is showing in this budget fight.”

Murphy said the state Legislature’s proposal is built on nearly $1 billion in unsustainable, temporary revenues, through a one-shot tax amnesty program and a “two-shot” increase in the Corporate Business Tax that would expire after the 2020 fiscal year.

Murphy said corporate taxes have historically shown greater volatility and have been more difficult to accurately project.

In addition, the Legislature is pushing for $450 million in new spending, while also banking on unverifiable savings and efficiencies, Murphy said. Under the state constitution, only the governor holds the authority to certify state revenues necessary to ensure a balanced budget.

“I’m not going to certify a budget based on gimmicks. We are ending the practice perfected under Chris Christie of making numbers fit a narrative,” said Murphy.

The governor said his budget includes a 15-year low reliance on nonrecurring revenues, and would close with a projected surplus of more than $740 million.

Here is Murphy's press conference:

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