Budget standoff over dueling tax hike proposals continues in Trenton

BY Michael Aron, Chief Political Correspondent |

While the Senate Budget Committee was poised to pass a budget bill Tuesday afternoon, and the Assembly Budget Committee prepared to do the same, Gov. Phil Murphy stood in the Trenton train station to underscore his budget’s $242 million commitment to NJ Transit.

“We can’t have a one-shot or two-shot infusion once every decade and expect to fund a safe and reliable mass transit system. We need long-term and sustainable revenues year over year to do so,” Murphy said.

Murphy’s complaint is that the Legislature’s budget relies on a temporary $800 million increase in the corporate business tax. It would sunset after two years.

Murphy’s version of the budget hikes taxes on million-dollar incomes instead of on business and doesn’t go away.

“The principle of sustainable year-in and year-out revenue is what I’m fighting for,” Murphy said.

Murphy’s chief antagonist on all this is his fellow Democrat Senate President Steve Sweeney. Sweeney says the governor is trying to dictate to the Legislature.

“That’s not the way it works around here. You know that, Michael,” said Sweeney. “The Legislature has a say in the budget. We want to work with him. We’ve done a great job, I think, working with him for the last five months. We did a great job on school funding with him. This is the one area where they won’t negotiate, and it doesn’t work that way.”

RELATED: Sweeney: Murphy has ‘refused any compromise at all’ on budget

A school funding reform bill did pass the Senate Committee Tuesday. The Assembly Committee was expected to follow suit.

It aims at equalizing state aid to school districts that have grown or contracted, but Murphy said Monday he won’t sign a school funding bill until the budget is done. He is holding it as a bargaining chip.

Meanwhile, the argument over which tax to raise has reached a stalemate. Murphy says hiking the corporate business tax will drive not just business owners away but their thousands of employees as well. Sweeney’s got a response to that.

“People that are millionaires, when they move and they own their businesses they normally like to live near their businesses. So the same argument he’s making, I can make too,” Sweeney said.

The struggle between the two top Democrats in Trenton is seen now as personal. They each sound exasperated.

“If you don’t like my proposal, then come back with something else. That’s a negotiation,” Sweeney said.

“Am I a reasonable individual? Have I ever said ‘heck no, my way or the highway?’ Never,” Murphy said.

“The Legislature is not going to accept ‘my way or the highway’ talking. We’re not subservient,” Sweeney said.

Republicans say, a pox on both your tax hikes.

“Increasing taxes, especially in the way taxes are increasing now, will mean that this Amazon or the next Amazon won’t come to the state of New Jersey,” Minority Leader Sen. Tom Kean said.

Democrats say they have another 11 days before the June 30 constitutional deadline and predict they’ll get a budget done and avoid a government shutdown.

“The Senate president is very comfortable. He stands behind his revenue on the CBT. And the governor has every right to stand behind his revenue on the millionaire’s tax,” said Sen. Paul Sarlo, who chairs the Budget and Appropriations Committee. “Hopefully we’re going to find common ground. We’re going to get there. I know the press would love to see a shutdown of all Democratic leaders. I think we’re going to disappoint all of you. We’re going to get there.”

On that, Murphy agrees.

“It’s the 19th. I remain optimistic we’re going to figure this out,” Murphy said.

The governor said he stands by Monday’s threat to veto the Legislature’s version of the budget if it comes to his desk. That has people here gaming out whether there are enough votes in the Senate and Assembly to override a gubernatorial veto.