At union convention, Murphy holds steady on tax increase proposal

BY Michael Aron, Chief Political Correspondent |

Gov. Phil Murphy got a standing ovation from the AFL-CIO. He listed about 10 things he’s done for labor, more in five months than Chris Christie did in eight years, he told them.

He thanked them for their electoral support.

“Without your work last fall, I would not be standing here today,” Murphy said.

He called them an important partner in his ambition to modernize the state.

“New Jersey was built by organized labor hands, and it will be organized labor hands that will rebuild our state. You have my word,” Murphy added.

Murphy’s visit came at a time when he’s arm wrestling with legislative leaders over tax hikes. Murphy wants to increase the income tax on millionaires and restore the sales tax to 7 percent from its current 6.625 percent.

Senate President Steve Sweeney and Assembly Speaker Craig Coughlin, both Democrats, are fearful of raising those. Sweeney’s preference is a two-year surcharge on the corporate business tax. Coughlin wants to raise revenue through a tax amnesty program.

Tuesday’s Star-Ledger reported on a one-page memo from the Democrats that appears to sharpen the battle line.

Murphy stuck with his tax proposals at this event. He doubled down on the sales tax hike as well.

“And yes, undoing a complete gimmick and resetting the sales tax so we can invest in child care tax credits for working families is the right thing to do,” Murphy said.

Legislative Democrats like Sen. Jeff Van Drew are against the millionaire’s tax and raising the sales tax.

“The corporate tax even concerns me. We’ve been taxed, tolled, feed and charged to death in the state of New Jersey. I think it’s really problematic to have increases in taxes at any level at this point,” Van Drew said.

So far, neither side has budged.

“Sustainable, responsible investment requires sustainable, responsible revenues, and I feel good about where we’ve been and where we are,” Murphy said.

Labor leaders we spoke to liked what they heard from the governor.

“I think he’s going to be a governor for us. Very positive, union friendly,” said Darnell Ross, vice president of IFPTE Local 200 of the NJ Turnpike Supervisors Association.

“A fraction of a percent in sales tax, if it brings in revenue. We’re suffering from no revenue, a lack of revenue. Clearly the millionaire’s tax, I believe, is a good idea,” said Central Labor Council Executive Vice President Jean Pierce.

“The Legislature has to behave responsibly, so one shots are not going to work. We’ve shown that many times in New Jersey,” said Hetty Rosenstein, state director of CWA New Jersey.

“Together we can pass a budget that ends the games and gimmicks of the past and invests in our working families. That’s what this is all about,” Murphy said.

In the next two and a half weeks, Murphy and the legislative leaders have to arrive at an agreement or state government will shut down July 1. The question is, who blinks first?