Governor Phil Murphy began his 2021 Budget Address with an expression of thanks to everyone who sent well wishes for his upcoming kidney surgery. From there, he hopped onto the business at hand. He began by invoking President FDR, whose presidency oversaw the implementation of the New Deal and a vast expansion of governmental spending. It was a sign of what was to come: namely, a list of increased investments and a further-expansion of government. The governor cited rising wages, economic quarterly growth outpacing the national average, and painted a generally very rosy picture of the state. But throughout the speech, the governor made it clear that the biggest New Jersey budget in history was designed for the benefit of the middle class.
Full of points sure to resonate with his progressive/liberal base, the budget speech also left significant red meat for wary fiscal conservatives to bite onto and attack. Nevertheless, Murphy was emphatic to tie his major points into the biggest complaint every New Jersey resident (and the bulk of voters across the spectrum) has: the property tax burden. The governor said that, “Ours is a vision of long-term and sustainable investment in our people and our communities – in their futures, and in ours.” Over the course of his speech, he would explain why his proposals would make New Jersey a fairer, less expensive, and better place to live. At the same time, he extolled a number of achievements and triumphs for the Garden State, saying that New Jersey was the #1 in education in the country, and that, “No other administration has done so much in its first two years to control property taxes, or to deliver more property tax relief. In just our first two years of working together, we have achieved the first- and fourth-lowest year-over-year increases in property taxes on record. And, statewide property values have grown more in our first two years than at any point since the Great Recession.”
The governor’s speech framed himself as the champion of the middle class, invoking that segment of society at every possible opportunity as both an attainable objective for the poor and as a measure of the state’s success. Indeed, the bulk of the speech could essentially be distilled down to reassuring the public that the middle class, while not exclusively but particularly, had the most to gain with the implementation of the new budget—and less directly but nevertheless implied: with the governor’s leadership. “I know that by working together, we will arrive at a budget that continues to restore the faith that we can work together for the common good,” the governor said, “and that we can deliver upon the promises we’ve made to our middle-class families – and, just as importantly, to those striving to join our middle class.”
The relationship between Senate President Steve Sweeney and the Governor has been contentious, to say the least. But Murphy appeared to play the part of deal-maker and peace arbiter, saying, “The Senate President and I agree we need to do all we can to ensure the stability of our pension system. So, in addition to a $794 million increase for Fiscal 2021, our administration will make an extra $279 million payment into the pension system this current fiscal year. This is a roughly $1.1 billion increase in our overall pension payment. This administration will have put more back into the system in just three years than the preceding one did in eight.” The governor seemed to manage a zing at past Governor Chris Christie while making a signal at intra-party consensus.
In that same spirit, the Governor revisited the millionaire’s tax, which he was unsuccessful in advancing through the legislature previously. Sweeney has called for addressing the state’s ballooning pension liability. “And, because of the work we’ve done together over our first two years to restore our state’s fiscal standing, we’re also able to fulfill our obligation by making a nearly $4.9 billion total payment into our pension system,” the governor said, laying the groundwork for his next logical step. “The Senate President and I agree, we need to do all we can to ensure the stability of our pension system. So, in addition to a $794 million increase for Fiscal 2021, our administration will make an extra $279 million payment into the pension system this current fiscal year. This is a roughly $1.1 billion increase in our overall pension payment.” Never missing an opportunity to pitch some sand in Christie’s face, Murphy said that, “This administration will have put more back into the system in just three years than the preceding one did in eight.”
From there, the governor definitively returned to his former battleground, apparently armed with a new ally for the coming scrap. “We can keep this progress going, but only with recurring and sustainable revenues. And there is no better alternative than a millionaire’s tax.” Although this statement brought no applause from Sweeney, Murphy enjoyed a positive response from the floor – of the gallery. “It’s the way we both ensure tax fairness for our middle-class and fairness at the same time to the dedicated rank-and-file women and men of our public workforce.”
Murphy’s desire for a millionaire’s tax was, “a matter of fairness to our middle-class homeowners and renters, our seniors, and the countless working families reaching to pull themselves up and into the middle class.” Sticking to his theme of championing the middle class and tying everything to property tax relief, he added that, “The property tax is the most unfair, regressive, and cruelest of taxes. A middle-class family in Merchantville or Milford or Moonachie, after all, pays a greater percentage of their income in property taxes than a millionaire anywhere else.”
The governor said that there was not one “iota” to evidence to suggest that millionaires were leaving New Jersey because of high taxes, but that the flight of the middle class was a real thing. The poorest in society, after all, cannot afford to move, and the richest are able to afford the expense. “So, I thank the Senate President and welcome his willingness to embrace a millionaire’s tax in this budget,” Murphy said, demonstrating a small but clear win for his agenda. “When we have tax fairness, we can continue our historic investments in our pension systems and in our middle-class families.”
When the governor spoke about education, he was sure to devote some credit to his often-antagonistic fellow Democrat, saying, “through reforms championed by Senate President Sweeney, those new school funding dollars are working more efficiently and effectively. But, just as important, school funding is property tax relief. Let’s be absolutely clear – every new dollar in school funding is a new dollar of property tax relief. Every new dollar we provide is a dollar that doesn’t have to come out of the pockets of property taxpayers.”
Murphy said that the budget, “proposes keeping us on our upward trajectory with an additional $336 million investment in our K-through-12 classrooms for the upcoming school year” and that “we’ll invest an additional $83 million in pre-K, allowing us to expand opportunities for an additional 3,000 children.” This brought about a standing ovation.
The governor hammered home his theme again, asserting that in three years the state we will have restored nearly $900 million in school aid, and “every penny is property tax relief.”
The governor’s proposal lists a number of new or increased spending venues which is certain to rile conservatives and give pause to centrists who are concerned about the state’s financial prospects. Increased investment in education, health insurance subsidies, joins with municipal spending initiatives for shared services—ostensibly to reduce municipal taxation, NJ Jobs Plan, a tripling of funds for the “Commission on Science, Innovation and Technology”, the Clean Energy Fund, a $600 million general fund subsidy for NJ Transit, $30 million for electric vehicle rebates, $80 million towards the Drinking Water Program, and a host of healthcare issues ranging from the opioid crisis to women’s health and “family planning services”—a phrase sure to arouse the suspicion of social conservatives.
Topical subjects which went without associated names, but which certainly could be read in the subtext, touched on tax incentives and abuses by “special interests” rather than for the benefit of the public. Murphy also said that, “I am pro-jobs, pro-growth, and pro-accountability. That is why I am for reforming a failed incentives system, just as I am for reforming our ethics laws – to let more light shine
in. When we reject transparency, in any forum, bad deals are made and taxpayers are hurt.” These remarks come following the administration’s shadow of sexual harassment accusations, the Katie Brennan case, and Senator Weinberg’s movement to rally women to speak out. It is notable that Barbara Buono sat next to First Lady Tammy Murphy, only days after the Huffington Post published an article in which she detailed her own misogynistic experience in the world of state politics.
Then, as the night follows the day, came a flurry of responses from various political figures as well as public and private entities. A comprehensive list can be found here with a few particularly notable ones below.
“The Assembly, I’m certain, will have additional ideas and priorities to discuss during the review process,” Speaker Coughlin said through a statement following the address. “We will continue to look for more government inefficiencies and cost savings, as we do each year. I remain cautious of increasing broad-based taxes.” Insider sources said that the speaker apparently is a little more skeptical of the current budget, however, that he may let on while Senate President Sweeney “wants to deal.”
Assembly Minority Leader Jon Bramnick said that he felt Murphy was a good man and that he liked him, as a person. So with that said, the gloves came off and the Republican assemblyman went in swinging. “It was a lot of cheerleading but did not address the taxpayer issues of this state,” Bramnick said, describing the budget as “a blueprint that would raise taxes 18% over three years or six percent per year over three years” with “six new taxes, including a corporate responsibility tax” designed to off-set the Medicaid costs shouldered by the state from companies that do not insure their employees.
Bramnick blasted the governor’s budget, saying, “This is a governor that simply believes that government is the answer to the problems in New Jersey,” further saying that New Jersey as “a state with the worst business climate in the nation.”
Senate Minority Leader Tom Kean released similar remarks, saying, “Anyone who’s looking for a plan to make New Jersey more affordable will be disappointed by a budget proposal from Governor Murphy that raises taxes and makes no effort to constrain costs…. In a year when state revenues are booming, the governor’s spending plan represents a missed opportunity to demonstrate fiscal discipline and provide real tax relief to New Jerseyans.”
Cutting to the matter of the tax burden and subsequent flight of residents, Kean struck out, saying, “Make no mistake, this budget is a continuation of disastrous fiscal policies that are breaking up too many of our families. This proposal doesn’t move the needle on giving people a reason to stay in New Jersey.”
Senator Ronald Rice was generally supportive of the budget, but said that, “Despite all that was said, I will not vote for any budget until we pass legislation to decriminalize marijuana. We have an opportunity to enact meaningful social justice reform in New Jersey, but we have to have a real commitment to get it done. By releasing those incarcerated for marijuana offenses, we will free up $140 million in the budget.”
The governor has laid out his budgetary vision, which satisfies some and inevitably angers others. What will ultimately come of it remains to be seen, but a hefty amount of ink is sure to be spilled in the coming days and weeks. For better or worse, depending on one’s point of view, New Jersey never fails to live up to the adage that “the best laid plans of mice and men often go awry” so the budget can be seen in that light as a starting point for the political strategies to come.