TRENTON – Now it looked grim.
But what really gnawed on people was that it didn’t have to be.
The millionaire’s tax was the stumbling block to getting the $35.6 billion budget done.
Governor Phil Murphy wanted it.
Senate President Steve Sweeney (D-3) didn’t.
Facing an imminent state government shutdown, negotiators talked and texted all day, trying to get Sweeney to bite on some version of a millionaire’s tax.
Dug in with a preference for a corporate business tax hike, he didn’t want to do it, but as time ticked down toward the July 1st deadline and a friendly Assembly Speaker Craig Coughlin (D-19) leaning on him, Sweeney decided to move. As part of a budget deal, he’d agree to a $5 million threshold for a millionaire’s tax. Murphy had wanted $1 million. The Governor had wanted $1 million at the beginning and he wanted it in the compromise he put forward earlier this week.
So now Sweeney put $5 million on the negotiating table, with Coughlin’s blessing.
A deal was at hand.
Apparently they put the offer together between their morning and afternoon meetings with the Governor.
Sweeney in the video below loads his colleague, Senate Majority Loretta Weinberg (D-37), aboard his sport utility vehicle just after having left the last meeting with Murphy, and just prior to the press conference he did with Coughlin.
But Murphy rejected the offer and, according to Sweeney and Coughlin – and this point is critical – didn’t present a counter offer.
At his own press conference, the Governor told reporters it wasn’t true. He had, in fact, counteroffered. But when the press followed up and asked him what he countered with, he didn’t supply an answer.
That rankled those insiders who had helped finesse the deal and gently propelled Sweeney in Murphy’s direction. Sources said they believe Sweeney intentionally presented $5 million to Murphy’s $1 million as a way to get to $3 million. Three million would have been a good deal, at least one source howled. Why didn’t he cut it?
The source said he began the day angry with Sweeney and ended it seething over Murphy’s reaction to the mega millionaire’s tax and his failure to counter.
As people in his caucus crumbled toward the millionaire’s tax – Assemblyman Ralph Caputo, then Assemblyman Benjie Wimberly, then Assemblyman Nick Chiaravalloti – Coughlin realized he had to play a slightly more aggressive role in reaching consensus.
Aggression’s not his nature.
One could make the case that he got to the speakership in part because he’s mild-mannered.
He would do it his way.
In his own words, referring to Murphy but he might have referred to himself, he would disagree, but pleasantly.
He wouldn’t say when asked today at his and Sweeney’s press conference if he was personally the main impetus behind the senate president moving toward the millionaire’s tax. He doesn’t like to discuss the details of what happens behind closed doors during negotiating processes like these, he said, and Sweeney agreed.
Acknowledging just 30 hours left before a government shutdown unless he acts on the budget – and a shutdown all but inevitable now given the constitutional timing crunch – Murphy didn’t look done as he announced to reporters that he would be meeting his cabinet this evening.
Did he plan – after all – to summon a counter offer to what Sweeney had presented?
The question lacked power, it seemed.
The moment was lost.
Those insiders who felt Sweeney made a mistake when he unveiled a seasonal beach rental tax rental option, thereby giving Murphy an opening to equate the debate to millionaire’s tax versus a middle class tax and firm his negotiating hand, now saw Murphy stumble by apparently leaving that $5 million on the table without a counter.
There was ebb and flow to this fight.
It was a statehouse seesaw.
More than a few people grumbled about Murphy mugging for a national audience, with the likes of two former presidential candidates (Al Gore and Howard Dean) both sounding off on the budget crisis in support of Murphy. The Governor repeatedly refers to polling that backs his assertion of the millionaire’s tax as a preferable new revenue generator. He also routinely references his statewide victory last year “by two touchdowns.” And yet, to Sweeney’s point in his press conference with Coughlin, New Jerseyans also want demonstrable proof of spending cuts in inefficient areas of government and real cost savings. Look at the local Linden election this year. His foes screamed about temperament, but while maintaining services and holding the line on taxes, Mayor Derek Armstead also eliminated the garbage tax. Off the line, he won in a landslide.
Sweeney gets the argument.
So does Assembly Republican Leader Jon Bramnick (R-21), who knew he could – with impunity – announce his decision not to cooperate on emergency provisions for Democrats to pass their budget in the 11th hour because their budgeting talks center around raising taxes.
But then there was the Senate President voting for the millionaire’s tax five times during the Christie era, and the Trump tax cuts more than covering what those upper income earners lost with the elimination of the state and local tax deductions, to Murphy’s point. It was a jarring contradiction, one members of the press corps laughed at openly.
But again, today, Murphy appeared to give his imperfect fore an opening.
If Sweeney stumbled with the rental tax, Murphy headed into Saturday bruised by the perception – at the very least – that he didn’t try to get five to three on the millionaire’s tax.