Gov. Phil Murphy’s Tough Day with the NJ Legislature

Insider NJ editor Max Pizarro gives an analysis of recent political losses suffered by Gov. Phil Murphy, including how the NJ legislature, which is controlled by his own party, passed a budget without his millionaire's tax and an extension of NJEDA tax incentive programs that have been under investigation by his administration.

A NJ legislature controlled by his own party ran over Governor Phil Murphy on Thursday in the most devastating repudiation to date of his tenure as the state’s chief executive.

They passed a budget without a millionaire’s tax, even after the governor had run television ads exhorting a budget that contained the expanded tax and as recently as two days ago said millionaire’s tax or bust; and they slammed through an extension of tax incentives the governor and his allies sought to throw into question with a criminal referral connected to the program that sent subpoenas in the direction of South Jersey.

They rammed their alternative agenda with the piled-on affirmation of Republicans in the senate, a heavy serving of praise even by those GOP senate members who voted no, and with a 54 vote-veto proof majority in the assembly.

It was a day that revealed the eerie powerlessness of a man invested with the most powerful governorship in the country, overladen with absurdity when circumstances required U.S. Rep. Donald Norcross (D-1), brother of the governor’s arch-rival, South Jersey Power Broker George Norcross III, to reach out for disaster assistance for that very part of the state wreaking havoc on Murphy’s governorship.

It was the mini-Hurricane Sandy scenario that – in purely political terms  – made a hero out of no one and simply put the punctuation mark on a day of chaos for the governor.

No one talked much about Murphy.

It was as though he was a nonentity as one – or two – feeble entreaties about the need for a millionaire’s tax died on the floors of power.

“It will be interesting to see what he does now,” said one source, who wants to be sympathetic to the governor, who nonetheless had to acknowledge what looked like a kayo by the Democratic legislature of the affable Democratic governor.

Was the loss so concussive that in order to rationalize it, Murphy will have to convince himself, if he hasn’t already, that the legislature is simply just a collective of controlled organizational underlings that don’t deserve the respect of the average hard-working citizens of the state, and therefore a loss in their corrosive midst actually reflects a win out there in the real world? Or will he regroup, realize what he’s done wrong, where he hasn’t connected, where he’s failed to call, recognize that not every person in the legislature is a drone of South Jersey, and attempt to build real alliances in the legislature?

They were significant questions.

“Right now, he needs to find out what [Senate President Steve] Sweeney and [Speaker Craig] Coughlin drink and order cases of it as he sizes up this budget, makes a few cuts, salvages what he can from the EDA extension and call it a day,” said the source.

“It’s his best shot at dignity at this point,” the source added.

Murphy’s allies murmured something about the ongoing investigation into the businesses that reaped the benefits of a dubious – and possibly illegal – process to award Economic Development Authority tax credits. But they also seethed in the knowledge of Norcross’ impending visit to Trenton on Monday, where he will testify before Sweeney’s EDA legislative committee, presumably to give his “side of the story.” It had the feel of the governor’s nemesis kicking comfortably around in the throne room on the heels of Murphy’s worst loss.

A source, too, couldn’t help but note the New Jersey Education Association’s (NJEA) retreat back across the Rubicon on the millionaire’s tax, when the powerful teacher’s lobby – one of Murphy’s staunchest allies – issued a statement – just two days after Amalgamated Transit Union Chief Ray Greaves asked “Whose side are you on?” in a hard-nosed assessment of State Street division – of neutrality on the budget.

Hoots of derision abounded.

“[Over a million dollars] and not a single, not one member, stood with him,” said another source, hearkening to the television ad campaign.

“Murphy got crushed today,” he added. “For the moment. But just awful. Humiliated.”

The political arm of his empire failed.

A year after members criticized him for inserting himself into the budget drama on behalf of the governor, Democratic State Committee Chairman John Currie had nothing to say, and no apparent influence on Passaic lawmakers who voted in favor of the budget without the millionaire’s tax.

Another Murphy ally, Bergen County Democratic Committee Chairman Lou Stellato, had just received passage (albeit with a bumpy ride administered by veteran state Senator Gerald Cardinale (R-39) – from Sweeney’s senate to a position he craves at the Sports and Exposition Authority. Two days after that favor, Middlesex County Democratic Committee Chairman Kevin McCabe (Coughlin’s party organization pooh-bah) attended a party in New York for Bergen up-and-comer state Senator Joe Lagana (D-38).

“You may want to note, at some point, the implications of the state chairs’ race on the burgeoning relationship between the South/Middlesex and new Bergen leadership,” said a source.

“Those were Stellato votes out of Bergen because of his relationship with Currie,” the source added, then referenced incoming Bergen County Democratic Committee Chair Paul Juliano.

“Juliano may not be so willing to throw it to John [Currie].”

Murphy wasn’t the only object of scorn among the political classes.

One source, coming out of the senate after Republican senators voted for the budget, scratched his head over why Senate Minority Leader Tom Kean (R-21) let a raggedy caucus sign off on the $39 billion document as he prepares to head into his own 2020 challenge of incumbent U.S. Rep. Tom Malinowski (D-7).

“So much for contrast with Democrats,” jeered the source.

Throughout, an overall affection – and certainly respect – for Sweeney permeated.

It was his day, as much as it was Murphy’s defeat.

The following memo providing historical context to the budget circulated gleefully:

A look back at Governor Murphy’s comments on the Legislature’s FY2019 budget 

(He signed the budget the Legislature passed) 

State shutdown a ‘distinct possibility’ after ‘total breakdown’ in budget talks, Murphy official says 

June 15, 2018 | NJ.com | Matt Arco & Samantha Marcus 

“I have a simple approach: Fix what’s broken and make sure that everyone is paying their fair share,” Murphy continued. “New Jersey didn’t elect me to paper over problems with the same failed policies of the past.” 

 

Lawmakers plan to send Murphy their own budget, as talks collapse again 

June 15, 2018 | Politico |Linh Tat, Ryan Hutchins&Katherine Landergan 

 

Not long after Sweeney‘s press conference, Murphy issued a statement in which he slammed Christie, his predecessor, for relying on “short-term gimmicks” in his budgets, a move that contributed to the state’s 11 credit downgrades. 

“I refuse to do that,” Murphy said. “When it came to making the hard choices to fix our problems, my predecessor kicked the can down the road — I won’t. New Jersey deserves a real budget that offers real solutions.” 

 

Phil Murphy vows he’ll veto fellow Democrats’ state budget plan 

June 18, 2018 | NJ.com | Matt Arco 

 

 ”I will not sign any budget based on numbers that I believe are not sound and sustainable. I’m not going to certify a budget based on gimmicks.” 

 

Murphy insisted he wasn’t playing a game of chicken. 

 

“This is no game,” he said. “I got elected with a clear mandate to stop the games, and that’s why I’m here.” 

 

Murphy: I’ll veto budget lawmakers plan to pass this week 

June 18, 2018 | Politico |Ryan Hutchins 

 

Murphy said he doesn’t want to be party to the second state government shutdown in as many years, but he said he wouldn’t back down from his position. He would not say if he had offered any counterproposals to lawmakers, saying he’s the only one with an actual proposal. 

 

“There’s one person here who’s presented a full budget. One person,” the governor said, holding up the 600-page plan. “And I stand by it.” 

 

 

Murphy and top Democrats fail to reach budget deal 

June 21, 2018 | NJ.com | Matt Arco 

 

Murphy accused the Legislature of sending him a budget that mirrors “gimmicks” that his Republican predecessor, former Gov. Chris Christie, signed off on during his eight years in office. 

 

“Unfortunately, the Legislature seems intent of keeping the legacy of Chris Christie alive and well in Trenton, with a budget to match,” Murphy said. “I will not put forward gimmicks and games that I know are ticking time bombs and call it a day. We did that for eight years, and look where that got us.” 

 

Democrats defy Phil Murphy by passing their own budget, and he links them to Christie 

June 22, 2018 | NJ.com | Brent Johnson 

 

The governor declined to say Thursday what he’ll do, saying only that “everything’s on the table.” 

 

New Jersey lawmakers pass doomed budget after talks fall apart again 

June 21, 2019 | Politico | Ryan Hutchins, Katherine Landergan&Matt Friedman 

 

Murphy said he had argued privately with the lawmakers over their revenue estimates, saying his administration had produced different projections. He accused them of playing politics, and chided them, declaring,  these negotiations are not about us.” 

 

“Who wins or loses here in Trenton is meaningless next to whether we do the right thing by the people of New Jersey,” Murphy said. “I will not put forward gimmicks and games that I know are ticking time bombs and call it a day. We did that for eight years and look where that got us. 

 

“They are why our finances are a national joke,” the governor said. “They are why the people of New Jersey have continually seen the promises made to them in one year broken the next.” 

 

Murphy Won’t Rule Out Line-Item Veto, But Keeps Talking With Legislators 

June 26, 2018 | NJ Spotlight | John Reitmeyer 

 

During his own news conference, Murphy tallied up a total of $855 million in projected revenues that he said he views as shaky, including assumed public-worker health-benefits savings and other savings from their prescription-drug programs. 

 

“We must have a budget built on sustainable, reliable and real revenues,” Murphy said. 

 

Legislature’s budget proposal DOA, Murphy says 

June 25, 2018 | NJ Biz | Daniel J. Munoz 

 

Under the Legislature’s budget, Murphy said, the state would land $855 million short of the administration’s target for a balanced budget by the end of the 2019 fiscal year. 

 

“The Legislature’s budget would end with a $104 million deficit and absolutely no dollars in surplus, zeroing out our proposed $751 million surplus,” Murphy said. 

 

Legislative officials have forecast a surplus of roughly $788 million under the Legislature’s budget. 

 

Murphy threatens to cut $855M from Legislature’s budget 

June 25, 2018 | Politico | Ryan Hutchins&  Katherine Landergan 

 

New Jersey Gov. Phil Murphy said Monday he would have to cut $855 million in spending from the Legislature’s $36.5 billion budget in order to sign it, claiming lawmakers had inflated revenue projections by hundreds of millions of dollars. 

 

The legislative leaders, who said they stand by their revenue estimates, have rejected more than $1.3 billion in tax hikes Murphy put in his own budget, saying “no” to a restoration of the sales tax hike to 7 percent and to a higher income tax rate for millionaires. The governor has said he won’t back an increase in the corporate business tax as lawmakers passed it 

 

The main issue at this point, Murphy said, is that the numbers from lawmakers simply don’t add up. His office released a one-page sheet detailing numerous issues with the Legislature‘s estimates. He said the gap would eat up the entire $750 million surplus he’s seeking, and then some. 

 

Phil Murphy offers tax hike deal to break N.J. budget impasse 

June 26, 2018 | NJ.com | Samantha Marcus 

 

“I remain … unable to certify that the revenues contained in this budget are sufficient to fund the programs we all support. Failure to provide sufficient funding places all of these programs at risk,” Murphy wrote. 

 

“It is not too late for us to bridge this shortfall,” he continued. 

 

In rejecting the Legislature’s budget, Murphy offered to merge his own spending plan and the Legislature’s to include a more modest increase in the Corporation Business Tax, a smaller increase on personal income over $1 million and a two-year phase in of a sales tax hike. 

 

Murphy offers budget compromise in meeting with top lawmakers 

June 26, 2019 | Politico | Ryan Hutchins&Katherine Landergan 

 

“I believe this compromise fairly balances our mutual concerns while strengthening our fiscal foundation,” Murphy wrote in the letter, provided to reporters by the governor’s office immediately after the meeting ended. “Moreover, we will restore value and fairness to New Jersey.” 

 

Murphy also said he was willing to accept other proposals from lawmakers, including budgeting $195 million in savings from efficiencies and a tax amnesty program expected to bring in $150 million in revenue. 

 

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