POLITICS & GOVERNMENT

Big questions heading into Murphy’s second budget address

BY Michael Aron, Chief Political Correspondent |

The Senate Budget and Appropriations Committee met Monday to take up some routine legislation. After Tuesday, it will begin two and a half months of hearings on Gov. Phil Murphy’s budget proposals.

Three of the big questions going into Tuesday are:

  • Will the governor propose a millionaire’s tax again, as he did last year, on incomes over $1 million?
  • What did he mean when he said last week the budget would include “significant and sustainable savings”?
  • Will he propose anything to further cut back on pensions or health benefits for public employees?

Senate President Steve Sweeney and Assembly Speaker Craig Coughlin fought him on the millionaire’s tax last June. They compromised on raising the income tax on those earning more than $5 million a year.

In his remarks to the state Chamber of Commerce last Thursday in Washington D.C., Murphy hinted that he’ll bring his original proposal back around a second time.

“I will speak once again to my commitment to tax fairness for our middle class families and seniors,” Murphy said.

We asked Democratic senators, who enjoy the majority, if the millionaire’s tax is coming back and if there really are significant savings.

“I don’t know. I’ve read reports that have been mixed, but I know that the leadership feels strongly, as well as many of the members, that it’s got to be a combination of both. If we’re going to raise any type of revenues, we have to see how we’re going to fix our long-term fiscal situation. New Jersey’s got a $40 billion pension deficit, we are in sever fiscal issues, so we can’t do one step fixes here and there to try and clean it up. We have to have a long-term solution,” said Sen. Vin Gopal.

“I am not opposed to the millionaire’s tax, but Jimmy Carter use to be a believer in zero-base budgeting. I think you really have to look at every department first, scrub it as best you can, and then make the case that at this particular point we have to raise a particular tax, and the least onerous would be the millionaire’s tax,” said Sen. Patrick Diegnan.

“I don’t think tax hikes are going to be particularly welcome. I’ll be interested to see that the governor’s tone is one where he wants to work with people. I suspect it will be,” Sen. Joseph Cryan said. Adding about the possibility of a millionair’s tax, “He’s made the overtures to show that’s what he’s committed to.”

Last year’s budget negotiations were acrimonious. Diegnan wants to see a more conciliatory stance on Tuesday.

“Obviously we’re all on the same page, we’re all on the same team. The Senate president, the Assembly speaker are terrific people as is the governor. Let’s try and bring everybody in the tent and work on solutions as opposed to a take it or leave it approach,” Diegnan said.

Murphy hinted at big savings in his budget.

“Perhaps more than any other in recent memory, it will put forward significant and sustainable savings,” Murphy said.

Sources told NJTV News that he’ll announce a deal with the CWA that will save the state $1.1 billion in health care costs.

Legislative leaders were briefed on the budget Monday afternoon by treasury officials.