Liberal groups praise Murphy budget, sales tax increase

BY Michael Aron, Chief Political Correspondent |

They call themselves the Better Choices Coalition. It’s a collection of mostly liberal and environmental advocacy groups that lobbies for progressive policies. Two dozen of them rallied at the State House on Wednesday in support of Gov. Phil Murphy’s proposed budget, which they think is wonderful.

“Yesterday, we were pleased to hear our new governor take us one step forward toward a fairer, more just budget,” said New Jersey Working Families Executive Director Analilia Mejia.

“Gov. Murphy got it right yesterday. To really get the state back on track, profitable corporations and top earners must pay their fair share,” said Sheila Reynertson, senior policy analyst for liberal think-tank NJ Policy Perspective.

“The budget is a moral document of this state. It is the way that we project how we, as the people of New Jersey, are committed to building the state up for all persons,” said Rev. Sara Lilja, director of the Lutheran Episcopal Advocacy Ministry of New Jersey.

The governor’s budget plan hikes taxes on incomes over a million dollars and closes two corporate loopholes. But it also restores the sales tax to 7 percent. As part of the Transportation Trust Fund deal two years ago that raised the gas tax by 23 cents, the sales tax was cut to 6.875 percent the first year, 6.625 after that.

Murphy yesterday proposed “resetting it,” as he called it, to 7 percent.

“Let’s be honest. The impact of the three-eights of one percent sales tax decrease has been nearly imperceptible to the average New Jersey family, but it has directly impacted our ability to provide services to, and greater, future investment in that same family,” the governor said in his budget address.

Republicans took issue with that yesterday, arguing the increase will affect people.

“It’s still a $563 million increase in taxes, sounds like real money to me,” said Republican Budget Officer Assemblyman John DeMaio.

“Respectfully, I think it’s beyond callous to think that people don’t notice when taxes are increased,” said Minority Leader Sen. Tom Kean.

Any hike in the sales tax disproportionately falls on people at the low-end of the income spectrum. That’s who these advocates normally fight for, but they agree with Murphy the poor won’t feel this restoration to 7 percent.

“The reduction in the sales tax that occurred two years ago was the reduction that nobody asked for. For low income families, it’s something they hardly noticed. They are not saving a bunch of money when it comes to purchasing products and things. A reduction in the sales tax is really noticed when you’re purchasing yachts,” said Brandon McKoy, director of government and public affairs with New Jersey Policy Perspective.

“It’s negligible. People tell me they don’t even feel a difference in it. They ask us why do we do something that stupid. What does 7 percent mean to them versus 6.625?” said Lt. Gov. Sheila Oliver.

“I think many families would trade that $70 or $80 a year for universal pre-K or higher wages,” said Mejia.

So the liberal groups are happy with the Murphy budget. Republican lawmakers, much less so. But it’s Murphy’s fellow Democrats in the Legislature who are likely to most shape the outcome.