Last week, I wrote a column, “The Jersey Budget Wars -Whither the Republicans?” (https://www.insidernj.com/jersey-budget-wars-whither-republicans/)
regarding the Republican vantage point in the New Jersey budget war between Democratic governor Phil Murphy and the leaders of the Democratic-controlled Senate and Assembly, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin, respectively.  I commented on the tax hikes proposed by each of the warring camps. 

Of the Murphy proposed “millionaire’s tax,” I wrote the following: 

 “The negative impact of the Murphy millionaire’s tax is evident both from the economic and revenue vantage points.  It is intended to redistribute income, but it will actually redistribute taxpayers, causing successful job creating entrepreneurs to relocate from New Jersey to other, more tax friendly jurisdictions.“

 Of the Sweeney-Coughlin proposed corporate business tax (CBT) increase, I wrote the following:

“From the standpoint of economic competitiveness, the new CBT increase is a major disaster.  It leaves the Garden State at a major disadvantage when it comes to competing with other states for corporate relocations and expansions.” 

The deal concluded today between the Governor and the legislative leaders implements the following tax increases: 

10.75% on a $5 million income threshold millionaire’s tax; a “mega millionaire’s” tax. 

2% hike on the state’s corporate business tax (CBT) over a four year-period. 

Regarding the economic competitiveness position of the State of New Jersey, this deal will have a far worse impact than either the millionaire’s tax or the CBT increase would have had standing alone.  By enacting these tax increases, the State of New Jersey is hanging a sign: NOT WANTED:  ENTREPRENEURIAL JOB CREATORS OR EXPANDING CORPORATIONS: 

In short, this budget deal is the worst of all worlds. 

For the NJGOP, this deal does provide real opportunity at a time when Donald Trump is inflicting serious damage to the Republican brand everywhere.

New Jersey Republicans can now proudly wear the banner of economic growth and campaign against these two tax increases, which will have a most deleterious impact on job creation and economic growth.  Any Republican legislator who votes to approve this budget deal would have to be politically vacuous. 

For the 2019 and 2021 legislative and gubernatorial election campaigns, the Republicans should have a one word slogan regarding the Murphy-Sweeney-Coughlin tax increases:  ROLLBACK! 

And it appears that one major Republican winner has emerged from the Jersey budget war:  Senate Republican leader Tom Kean, Jr. – provided that his caucus have few, or preferably no members who vote for the Murphy-Sweeney-Coughlin deal.  

Earlier in the week, Kean and his fellow Republican Senate leaders, Steve Oroho, Anthony Bucco, and Robert Singer sent a letter to Murphy, Sweeney, and Coughlin calling for structural budget reforms, including public employee health benefit reform and a cap on state spending increases.  When combined with opposition to tax increases, this is the exact type coherent fiscal message the Republicans need for a comeback in 2019 and 2021. 

If Tom Kean, Jr. continues to articulate this message, he may find Republican and Independent voters in New Jersey saying to him in a future statewide election, paraphrasing his father, former Governor Tom Kean, “New Jersey and you, Tom Kean, Jr. – Perfect Together!” 

Alan J. Steinberg served as Regional Administrator of Region 2 EPA during the administration of former President George W. Bush and as Executive Director of the New Jersey Meadowlands Commission under former New Jersey Governor Christie Whitman.