No budget deal yet, Sweeney announces counteroffer

BY Brenda Flanagan, Senior Correspondent |

“I don’t think there’s going to be a shutdown to be perfectly honest with you,” said Senate President Steve Sweeney.

But later Wednesday, Sweeney announced that Democratic lawmakers aren’t buying the governor’s latest budget compromise offer. Gov. Phil Murphy had offered a phased-in sales tax hike, a modified corporate business tax increase and a reduced version of his mainstay, the millionaire’s tax. But Wednesday, Sweeney said raising the millionaire’s tax to 10.75 percent is apparently off the table because it would drive wealthy New Jerseyans out of state.

“It makes no sense for people to stay here when you’re continuing to go after them,” Sweeney said. “I voted for it five or six times, seven times. Whatever you come up with, I voted for it. It’s not the right tax for now. I don’t support it.”

In the ongoing battle over how to fund the budget, Democrats Wednesday debuted their own funding compromise. It’s an effort to bridge the $855 million revenue gap Murphy identified and vowed to close by vetoing programs in the budget Legislators passed last week.

The counteroffer is topped by two new revenue raisers. Adding a surcharge on short-term property rentals that could generate an estimated $250 million more a year. And boosting the realty transfer tax from 1 percent to 2 percent on properties worth more than a million dollars. That could add another $110 million. Democrats also adjusted $306 million in revenue estimates to be more in line with the governor’s numbers, and threw in $233 million from items like a repatriation of corporate business taxes.

“I don’t like all these things, but in a willingness to look further and compromise with the governor, because we all want to compromise, no one wants to fight. We brought these things forward for one reason, compromise,” said Sweeney.

“But let me be clear, I’m not going to sell out New Jersey future, or Newark’s future, for the sake of a deal,” Murphy said.

Murphy held his own news conference Wednesday morning at Newark City Hall where Newark Mayor Ras Baraka and some Democratic legislators threw their support behind his proposed budget.

“We know that there’s a place to resolve this. We want it to be resolved immediately, and we think that everybody should pay their fair share,” Baraka said.

“A good deal beats a bad war, and the fact is that the governor has offered a compromise and hopefully the people that disagree understand that we’re trying to resolve the situation,” said Democratic Assemblyman Ralph Caputo.

The governor indicated, again, that he’s open to compromise, but he insisted the path to a budget agreement must include a millionaire’s tax. Otherwise, he would balance the legislature’s budget with his veto pen.

“Without that agreement, I’m prepared to do what is necessary. I am not here to play the same old games. Enough of the gimmicks. The people of Newark and the people of New Jersey deserve honesty, and they demand we treat state finances honestly as well,” Murphy said.

“If they shut it down, it’s because the governor has decided to shut it down because he wants to raise taxes on people, and we don’t want to do that. There’s no need for it at that point, and we gave the governor a balanced budget. We stand by out budget,” Sweeney said.

Sweeney said this is their best effort to compromise, and that they could draft and pass bills by Friday. Then he bounced the budget ball back into the governor’s court.