New Jersey Globe

Statements On Gov. Phil Murphy's Budget Address

New Jersey Globe — March 5, 2019

By David Wildstein

Phyllis Salowe-Kaye, Executive Director of New Jersey Citizen Action

"For too many years millionaires and large corporations have benefited from billions of dollars in tax breaks at the state and federal level while lawmakers claim poverty when it comes to badly needed investments in infrastructure, working families and seniors. It's time for these destructive policies to stop and for our millionaires and corporations to start paying their fair share. This budget puts us on that corrective course while also making middle class and working class New Jersyeans top priorities. Increasing the Earned Income Tax Credit puts more money in the pockets of working families trying to make ends meet. Investing in education and making community college more affordable will ensure that all our state residents have the chance to acquire the skills they need to compete in the 21st century economy. We look forward to working further with the Governor and our State Legislature to craft a budget that works for all New Jerseyans."

Raj Bath, Business Representative for New Jersey Main Street Alliance

"This budget brings our corporate tax incentive programs back in line with reality and levels the playing field for small business owners who pay their fair share of taxes. or nearly a decade our largest and most influential corporations and our wealthiest residents have benefited from massive tax breaks while main street New Jersey has been starved of critical investments in areas such as transportation, infrastructure and workforce development. This budget ensures that corporations and millionaires pay their fair share for programs and services that benefit businesses of all sizes. Small business is the backbone of our economy and New Jersey needs to invest our real job creators and the middle class that buys their goods and services, not corporations that give their profits to out-of-state shareholders. We look forward to working with Governor Murphy and the State Legislature on building a common sense budget that works for main street."

New Jersey AFL-CIO President Charles Wowkanech

"The New Jersey State AFL-CIO commends Governor Murphy for his efforts to make New Jersey a stronger and fairer state. His proposed investments and progressive agenda will help position our state for an even brighter future.

"Working families in New Jersey are over-burdened with high property taxes. However, this budget proposal would maintain Governor Murphy's commitment to tax fairness and help build a more secure middle class by raising the top marginal tax rate on income over $1 million.

"Ultimately, the plan set forth in the Governor's budget address demonstrates that his administration is committed to putting New Jersey's working families first. A higher tax rate on New Jersey's wealthiest families would not only promote tax fairness, but also allow the state to make more investments in public education, workforce development and apprenticeship programs, and infrastructure — in particular NJ TRANSIT.

"The New Jersey State AFL-CIO is also pleased that Governor Murphy plans to invest in meeting our state's public employee pension obligation. We urge the legislature to continue to work with the Governor to fix our state's ailing pension system and ensure a secure and sustainable retirement future for all public workers."

AFSCME New Jersey Executive Director Steve Tully

AFSCME New Jersey Council 63 supports the budget proposal that Governor Murphy unveiled today. The Governor's proposal continues to move New Jersey in the right direction by making investments in public services like education, transportation, higher education, and health care, while continuing to meet the State's pension obligations to public employees. We strongly support his plan to invest in crucial programs and create new revenue sources to help provide quality public services that the people of New Jersey rely on.

Governor Murphy's proposal is the start of the budget process and AFSCME New Jersey looks forward to working alongside him, Lt. Governor Oliver and those serving in the New Jersey Legislature to continue to reverse the damage done to New Jersey's economy by the previous administration and to build a stronger, fairer economy for the people of our state.

New Jersey Future Executive Director Peter Kasabach

"New Jersey Future is encouraged by the governor's commitment in his budget address to investing in critical infrastructure upgrades, particularly NJ Transit. Reliable public transportation is vital to the success of our cities and to meet the increasing demand for housing near transit, but this is not the only type of infrastructure in need of investment. Our water infrastructure is in desperate need of repair and we hope to see funding for this in the next budget."

Jersey First President Rosemary Becchi

"With one hand, Governor Murphy condescendingly patted the heads of New Jersey families and taxpayers with more promises of a fairer economy. With his other hand, he dove deeper into our pockets with more taxes to support more spending that digs us deeper into a financial hole. There's nothing fair here. New Jersey is being made more unaffordable for families and small businesses with Governor Murphy's 2020 State Budget plan. "Every household in New Jersey knows that when the family is faced with mounting debt and less income, we cut spending and develop a plan by which to live within our family means. Not Governor Murphy. He increases spending, talks about a rosier future and then makes another big grab for other people's money. "Governor Murphy is clearly tone-deaf to the concerns and needs of New Jersey families. While he has boldly given his spending plan a social media moniker of #MiddleClassBlueprint, it is clear to everyone who pays taxes and does business in this state that this is a #BlueprintForNJDisaster."

Sheila Reynertson, Senior Policy Analyst, New Jersey Policy Perspective

"The budget outlined by Governor Murphy sets a foundation for shared prosperity and fiscal health. It pairs significant cost savings with continued investments in critical programs and services, while also committing to a healthy surplus that will safeguard the state from future economic downturns or natural disasters. Simply put, this is a fiscally sound vision that invests in New Jersey's greatest assets while lifting up the most vulnerable families in the state. Further, we commend Governor Murphy for centering his speech on the state's role in providing opportunities to help New Jersey families thrive in a variety of ways, including increased funding for affordable homes, expanding free community college, covering birth support for Black mothers, and increasing the Earned Income Tax Credit. We also applaud Governor Murphy for his commitment to tax fairness and his inclusion of a true millionaires tax in his budget proposal. Given the state's growing income inequality, racial disparities, and lopsided tax code, asking New Jersey's wealthiest individuals to pay a little bit more is the definition of fairness. This overdo change in the tax code will impact less than one percent of tax filers, many of whom just received a generous tax break from changes to the federal tax code. The additional funds from a millionaires tax will help to fund the state's property tax relief programs and allow the state to continue investing in services that benefit all New Jerseyans."

Rob Duffey, Better Choices for New Jersey Coalition

"Governor Murphy just laid out a clear vision for getting New Jersey out from years of misguided trickle-down economics and reckless budget gimmicks. Tax cuts for wealthy heirs and heiresses, yacht owners, and big corporations have dinged New Jersey's credit ratings, made a mess of its finances, and kept us from making smart investments to move this state forward. The governor's proposal would be a big step towards restoring the public's broken trust. We are heartened to hear the governor renew his call for reforming New Jersey's out of control corporate subsidy programs. The state has already wasted $11 billion on lavish tax subsidies with no real proof that New Jerseyans are getting the jobs they were promised. We can't continue throwing good money after bad. Including a true millionaire's tax in this year's budget is simply common sense. It should be a no-brainer, not a flashpoint of debate. Voters know that our tax system is rigged against them and for the rich, which is why they overwhelmingly support raising taxes on the wealthy and well-connected. Other states that have raised taxes on the rich to meet their needs are doing well, because they've been able to invest in fundamentals like education, transit, and infrastructure. There is no credible policy argument for not raising taxes on the state's richest residents. The governor was right to include a millionaire's tax in his budget, and legislators should take a cue from their own constituents and throw their support behind it. We look forward to reviewing the governor's proposal in detail, and we're committed to making sure this year's budget invests in New Jersey's working families."

Republican State Chairman Doug Steinhardt

Winston Churchill said it best. "An appeaser is one who feeds a crocodile, hoping it will eat him last." When politicians say they will raise taxes on the wealthy, they always end up raising taxes on the middle and working classes, too.

Just last year, Phil Murphy and the Democrats set the bar for their Success Tax at $5M in income. Sounds like a lot, doesn't it? But, one year later, these same Democrats redefine success as any family making more than $1M a year. Still sounds like a lot, I know. But, that's an 80% drop from last year, and if the Democrats keep feeding and growing State government, you're next.

Take 20% of a million dollars and by year 3 of the Murphy Administration, a family earning $200,000 a year will be paying more. By year 4, a family earning just $40,000 could be next, NJ "success." Taxing and spending with impunity will eventually land directly in the pockets of New Jersey's working and middleclass families. It always does. It already has. Democrats hide taxes and fees in nearly every piece of legislation that leaves Trenton: rain taxes, parking taxes, and corporate taxes, ride-sharing, AirBNB, you get the point. And, it will only get worse. Stand up New Jersey. Take a stand against unrestrained spending and draw the line on no new taxes.

"After years of trying to sell the same slick worded, tax parity gimmicks, even prominent Democrats like New York Governor Andrew Cuomo and Senate President Steve Sweeney are themselves coming to terms with the fact that a Success Tax is a dangerous and slippery slope that is counterproductive to a healthy state budget," said Steinhardt.

The bottom line is, New Jersey has a spending problem, not a revenue problem, and if Trenton's government keeps growing, so will the amount of money Trenton takes out of the pockets of New Jersey's working and middleclass families.

Before today's budget address, Phil Murphy and the Democrats had already raised taxes by over $2B, to pay for a nearly 8% increase in state spending, and were still left with a $500M deficit. If something isn't done, Moody's has already predicted that that deficit will grow to $3B in just 5 years. New Jersey can't absorb another $3B in Democratic tax increases. There just isn't enough water left in the well.

For years Republicans have championed targeted savings, but career Democrats balked. Just yesterday I had a Twitter exchange with a Democratic operative who summed up so much of what's wrong with Trenton. Advocating for today's round of Democratic tax increases, he asked, "What cuts do you want to own to balance the budget?" For Democrats, the answer is obvious, they want none, since their offices are bought and paid for the by the public sector labor unions and special interests who benefit most from the State's excessive spending. But, if we're being fair and honest with ourselves, the answer is "whatever savings are needed to get the job done." New Jersey deserves honest answers to its real problems.

Start simply. Not every difficult problem has a difficult answer.

New Jersey needs a cap on state spending. The 2% cap on municipal spending proved to be effective at curbing runaway local property tax hikes. But, as usual, Trenton excluded itself. If a 2% cap is good enough for our Mayors, it should be good enough for Trenton, too.

Next, tackle pension reform head on. Stop pandering to New Jersey's special interests and start protecting its 9 million residents. We can no longer afford to define people's benefits, so we need to shift employees into less costly, defined contribution, 401K plans. We need to end platinum level health care, then require those whose incomes and social security meet a set threshold to contribute to the cost of their post-retirement care.

Finally, we need to incentivize businesses to grow and invest here, not chase them away with the second highest corporate tax in the country and the reintroduction to New Jersey of some of the worst of Obamacare's fine and penalty policies. The opportunity for New Jerseyans to start a business, find a job and earn a living is the only real pathway to the middleclass, a concept that was buried under the mountain of Phil Murphy's $38.6B budget.

New Jersey continues to lead the nation in the out-migration of businesses and residents, and with another $1.2B in tax increases on the horizon, that trend will continue, leaving New Jersey's working and middleclass families on the hook. There is no escaping the harsh reality that Phil Murphy's newest spending spree, while emotionally appealing, will be paid for by New Jersey's middle class. Period. Full Stop.

Tax foolishness isn't a solution to the state's real problems. The suggestions the NJGOP made here only begin to scratch the surface of the hard work that needs to be done to set Trenton straight. We are fortunate to have a group of Republican legislators and candidates who are grounded and determined to protect our state's future and the future of our state's hardworking businesses and families.

Trenton's over reach into everything from high density housing to how we educate our children won't end, until we end it. We can't let bad government chase us out of our homes. Let's chase bad government out of Trenton instead. It starts now, in 2019.

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