Murphy using school funding reform as leverage in budget battle

BY Michael Aron, Chief Political Correspondent |

Gov. Phil Murphy went to the New Jersey Department of Education today to highlight what his budget means for schools.

“The budget I proposed would invest an additional $341 million directly in New Jersey’s public school kids. Direct investments in classrooms, in expanding pre-K, that would begin a four-year process of finally and fully funding our schools,” Murphy said.

Tuesday, both houses of the Legislature advanced a school funding reform bill that Murphy agrees with, but he is using it as leverage to get his way on which taxes should be raised to fund the entire budget.

“Until we have an agreement on sound and sustainable revenues, we cannot have an agreement on school funding,” Murphy said.

Senate President Steve Sweeney and Assembly Speaker Craig Coughlin are dug in on their version of the budget. Murphy is dug in on his.

They insist that hiking the corporate business tax temporarily for two years causes the least pain. Murphy believes a millionaire’s tax and a bump in the sales tax are more popular and more palatable, and ultimately better for the school districts.

“They deserve more than just another one-shot, and as governor I cannot commit the state to a new school funding formula without knowing that we will be able to keep the promise beyond the 2019-2020 school year,” Murphy said.

It’s become a war of words. Sweeney complained Tuesday that Murphy’s not negotiating. We put that to Murphy Wednesday.

“I’m available every second of every hour of every day and the only price of admission for that conversation, there’s only one price, is that folks come to the table with sustainable long-term revenue sources,” Murphy said.

What’s happening to Murphy stirs echoes of what happened to Gov. Tom Kean in his first year in office. Inheriting a deficit, he proposed hiking the gas tax by 2 cents per gallon. The Legislature insisted that instead of that he hike the top rate of the income tax from 2.5 to 3.5 percent, and hike the sales tax from 5 to 6 percent.

It was considered front page news by the New York Times back then. Roger Bodman remembers it well having served in Kean’s cabinet.

“He wasn’t happy about it. He being typical Kean, as you remember, he was a very genteel and kind man. You never heard a harsh word out of his mouth, but he literally held his nose like this and signed the tax,” Bodman said.

And the political fallout?

“He suffered little or no political damage as a result of those tax hikes,” Bodman said.

We asked what his four decades in Trenton tells him about this standoff.

“It will work its way out one way or another. In two or three weeks from now this will be a bit of New Jersey political folklore,” he said.

So there is historical precedent for a first-year governor giving into the budget whims of the Legislature. It didn’t hurt Tom Kean in the long run. It might not hurt Phil Murphy, especially if he held his nose.