TRENTON, N.J. – A state government shutdown just got a little more likely on Monday when the New Jersey legislature, controlled by Democrats, bucked Democrat Governor Phil Murphy and introduced its own budget devoid of Murphy priorities.
Notably, legislative Democrats (many of whom face reelection this cycle, including all of the Assembly and one state senator) ignored oft-repeated Murphy requests for fees/taxes including an expanded millionaire’s tax and new fees imposed upon legal gun owners.
Some saw the historically tax-happy legislature’s resistance as a hopeful sign for FY 2020.
“Governor Murphy also planned to tax small businesses if their employees depended on the state Medicaid program for health insurance, but that is something small business owners often cannot control,” said Laurie Ehlbeck, state director of NFIB in New Jersey. “Employer plans can cost employees more in deductibles and co-pays than a government subsidized program, so workers frequently reject the plan their employer offers. A similar tax in Massachusetts was a disaster, and hardship waivers had to be granted to small businesses to avoid closure. Massachusetts is discontinuing the tax, and it’s the last thing we need in New Jersey.”
Murphy hasn’t ruled out signing a budget without a bigger-and-badder millionaire’s tax, but today’s legislative development raises the possibility of Murphy, who regularly feuds with Senate President Steve Sweeney, digging in his heels and fighting for a tax on the wealthy that’s resoundingly popular with his own far-left base.
It’s an ideological battle rather than a mathematical one; there’s no evidence that the millionaire’s tax (which presently applies to only income over the $5 million threshold) is filling the state’s coffers.
With or without his desired fees and taxes, the Governor needs to sign a budget before July 1st to avoid a shutdown.