Muoio defends Murphy’s budget

BY Michael Aron, Chief Political Correspondent |

Acting state treasurer Elizabeth Maher Muoio Tuesday afternoon defended Gov. Murphy’s proposed budget. She said the state has a structural deficit, that natural revenue growth is not enough to fix it, and some new taxes are necessary.

“This is not only unsustainable, it is unacceptable, and the governor is proposing a series of new revenue and budget initiatives to get our fiscal house in order,” said Muoio.

One new measure is that the state will now hold onto energy gross receipts money. It has long been an off-budget item and given entirely to municipalities. Now, the Murphy budget directs that money into the general fund, while promising to deliver it all in municipal aid. It’s about $800 million.

“I really believe you’re going to have a big lift concerning the energy tax. I know in my own district, mayors are encouraging to increase that dedication. Even though the promise is being made that the money will be the same, as I always say, I think the reason that people have accepted the gas tax is because it was dedicated for that particular purpose. To be taking something that’s dedicated away, I think is problematic,” said budget committee member, state Sen. Patrick Diegnan.

The governor wants to hike the income tax on the very wealthy and restore the sales tax to seven percent. All the while, he is promising to increase school aid, higher education aid, and funding for NJ Transit.

“Promises are easy to make, payments are difficult. Right this year, we hear a lot about one-time, down payments into the budget. Can you tell me has there been any extrapolations as to what next year’s budget is going to look like because of the down payments this year, say two or three years out?” said state Senator Steve Oroho.

“We’re going to have to work every year and look at every year how we’re trending out. We have estimates looking at what the K to 12 funding is the first of a 4-year formula. As I said in my opening, many of these initiatives are setting us on a path to completion,” said Muoio.

In the morning, the Office of Legislative Services, or OLS, warned the Senate Budget Committee not to keep dedicating certain taxes to certain programs.

“Dedication of revenue certainly absolutely has its place. These are important policy choices that you can make. In fact, the dedications I have referred to have been approved, not just by the Legislature, but by the voters. Those are constitutional dedications. When we divide money into silos, we’ve accepted certain limits on our flexibility,” said Frank Haines, Legislative Budget and Finance Officer at the New Jersey Office of Legislative Services.

Committee Chairman, Sen. Paul Sarlo says it’s too early to consider the tax hikes.

“We may see unprecedented tax collections on this April 15 due date. Before we can consider, discuss new revenue raises or new taxes, I think we need to get a handle on how much revenue is coming in from this last round of tax collections in the current fiscal year,” said Sarlo.

The treasurer and OLS repeat the exercise Wednesday before the Assembly Budget Committee.