Murphy, legislative leaders dig in their heels on budget funding

BY Michael Aron, Chief Political Correspondent |

It felt like a shutdown news conference. With 12 days until the deadline, Gov. Phil Murphy slammed the Legislature’s budget plan.

“Should the Legislature send me a budget proposal that looks like anything like these charts, I will veto it,” Murphy said.

The legislative plan is full of gimmicks, he said, when what the state needs is real revenue.

“They are proposing almost $1 billion in unsustainable revenues, either in one-shots or two-shots. They’re proposing $450 million in new spending beyond my initial budget. They are including savings and efficiencies that are largely not real,” Murphy said.

Murphy said he and the speaker and the Senate president met twice on Friday. He disputed press reports that it got testy.

“Nobody yelled at anybody. We just have a fundamental breakdown in how we see the health of this state, in particular its middle class,” Murphy said.

Murphy wants a millionaire’s tax and a restoration of the sales tax to 7 percent. Senate President Steve Sweeney and Assembly Speaker Craig Coughlin prefer hiking the corporate business tax.

Their revised proposal is for corporations between $1 million and $25 million to raise the tax to 11.5 percent. Corporations above $25 million would pay 13 percent. Those rates would hold for two years.

Sweeney and Coughlin addressed the media four hours after Murphy. The speaker said they’re giving Murphy what he wants on expanded pre-K, school aid and transit funding.

“I think it’s incumbent upon the governor to take a look at what we actually put forth, and I’m hopeful that when he does, he’ll recognize that 95 percent of the things that he’s looked for are included in that budget,” Coughlin said.

Sweeney defended choosing the corporate tax for an increase over a millionaire’s tax.

“The corporation business tax provides the necessary funding for the general fund to keep the budget in balance. Committing to two years is not a gimmick or a one-shot. It gives the governor two years to start fixing the things that are wrong here,” Sweeney said.

They said they’d put a budget on his desk this Thursday and then it’s up to him whether or not to veto it.

“I’ve never been involved in a budget, and this is my ninth budget, where I’ve been handed a budget by the governor and told it’s a good budget, it’s my budget, pass my budget without any compromise,” Sweeney said.

For now, Murphy isn’t budging.

“I’m asked are you still committed to the millionaire’s tax, the sales tax, closing the loopholes as a sustainable revenue matter, have you gotten off of that and the answer is no, particularly in the absence of a good alternative,” Murphy said.

“Only in Trenton do you see a shutdown in government because the Democrats cannot decide on which taxes to raise,” Assembly Minority Leader Jon Bramnick said.

Assembly Republicans today said they blame Murphy for the standoff more than Sweeney and Coughlin.

“With all due respect to the governor, his inexperience is showing in this budget fight. You need to talk to the other side and you need to compromise,” Bramnick said.

“The man thinks he’s running Goldman Sachs when he sits there, he’s got the final say and what he says goes. It doesn’t work like that,” said Republican Assemblyman John DeMaio.

“A negotiation is a negotiation. A ‘take it or leave it’ is not,” Sweeney said.

So as the positions harden, the likelihood of a government shutdown on July 1 goes up.