New Jersey’s switch to a Democratic governor has taxpayers on a dizzying ride.
Eight years of budget cuts under Republican Chris Christie left New Jersey with the worst-funded public pension of any U.S. state, the second-lowest credit rating, lagging economic growth and a crumbling and crowded transit system. Progressive Phil Murphy, elected in November on a pledge to “undo the damage” of his predecessor, in less than five months has approved and proposed spending that would cost the state $1.76 billion by 2020.
Democrats who control New Jersey’s legislature had ached to spend more, only to be thwarted time and again by Christie. But the extent of Murphy’s spending has factions warring within his own party. As the governor pushes to give residents “more value for their tax dollars,” some lawmakers are resisting his first budget pitch, a record $37.4 billion plan that depends on new or higher taxes on millionaires, retail sales and more in one of the most-levied states.
“The administration talks about a fairer budget,” Senate President Steve Sweeney, 58, a Democrat from West Deptford and the highest-ranking state lawmaker, said in an interview. “I want to talk about an affordable budget.”
The state must have a budget in place on July 1, the start of the fiscal year, or shut down government. Last week, the administration halted hiring and discretionary spending, and ordered agencies to update their shutdown contingency plans.
Murphy, 60, a former Goldman Sachs Group Inc. senior partner and U.S. ambassador to Germany, spent $22.5 million of his personal fortune to defeat Kim Guadagno, Christie’s lieutenant governor. The product of a working-class Boston-area family who identified with the Kennedy family’s Democratic values, Murphy pledged to strengthen the middle class and make New Jersey nationally prominent on worker fairness, gender issues, race, marijuana policy and climate.
Since January he has pitched higher spending on mass transit, restored $7.5 million to women’s health care and signed legislation compelling employee paid sick leave and banning pay discrimination. Those are all steps that eluded Democrats under Christie. Murphy has also deployed his attorney general, Gurbir Grewal, to join multi-state legal challenges to President Donald Trump on immigration, the environment and health care, popular issues in a state where Hillary Clinton won 55 percent of the popular vote in the 2016 election.
Revenue Raising
Whatever goodwill Murphy may have accrued, though, may not be enough to sway lawmakers from either party on his proposal to raise $1.5 billion in revenue from higher taxes on retail sales, corporations and the wealthy, plus new taxes on users of Airbnb Inc., Uber Technologies Inc. and yet-to-be-legalized recreational marijuana.
Without a legislative cheering section, Murphy risks falling short of three major initiatives: a record $3.2 billion pension payment, the first year of state-paid community college tuition and the most pre-school funding in 10 years.