Budget hole, Trump tax plan threaten to torpedo Phil Murphy’s big plans

There’s an old “Far Side” cartoon that I love. It shows a fishbowl, with a fire raging inside. Outside the fishbowl stands the daddy fish and his family. With a concerned look on his face, the daddy fish states, “Well, thank God we all made it out in time … ‘Course now, we’re equally screwed.”

Replace “burning fishbowl” with New Jersey, “family” with New Jersey residents, and “daddy fish” with incoming governor Phil Murphy, and the commentary still stands.

We were screwed before, and we’re still screwed. If I’m Murphy, I’m already looking forward to losing the 2021 election.

Here’s the thing: For the last year, Murphy has campaigned on spending gobs of money in an effort to put out the fishbowl fire that is our state. Fully funding schools, fully funding the pension system, turning our transportation system into something more closely resembling the early 21st century as opposed to the late 19th, making community colleges free, creating a state bank, raising the earned income tax credit …

And so forth.

But now, due to forces outside his immediate control, he might end up doing bupkis. By this time next year, I’ll lay you 2-to-1 the words “Phil Murphy” are going to be accompanied with an “accomplished next to nothing” every time his name is uttered.

Why? For starters, the budget hole, which no one is talking about.

“Murphy comes in January, and by the end of March he has to submit a balanced budget,” said Ben Dworkin, the director of the Rebovich Institute for New Jersey Politics at Rider University. “And it’s expected there’s going to be a $900 million shortfall just to continue doing what they’re doing today, to continue funding what they’re funding today.”

Dworkin explained some of the shortfall is due to cost increases in Medicaid, health plans, and the like. Additionally, the current budget is buoyed by one-shot deals, including a $225 million Exxon-Mobil settlement and the sale of the NJTV spectrum.

So where is Murphy finding money to balance the budget?

Well, forget that $300 million in oft-cited marijuana tax dollars; even if the legislature sends him a bill to sign — which is all of a sudden not a foregone conclusion — it will take years to ramp up and reach that financial goal.

How about the $650 million or so expected to be raised with a millionaire’s tax? Yeah, about that: “I’ve obviously listened to his comments, and I stand by mine, that we have to be pragmatic,” senate President Steve Sweeney said in a New York Times article published last Wednesday. “The assembly speaker and myself and the governor-elect need to figure it out. But we’re not going to rush into anything right now until we know exactly what we’re dealing with.”

In short: Sweeney is publicly waffling on the millionaire’s tax in light of Congress’s federal tax bill, which will hit wealthy New Jerseyans harder than Murphy’s millionaire’s tax.

But Dworkin thinks it will happen.

“It’s almost impossible for the Democrats to push aside the millionaire’s tax because there’s a shortfall when they walk in the door and they’re going to need that money,” he said. “Democrats won’t not support it now when they really need it.”

To be clear, the Dems have voted for the millionaire’s tax five times since 2010, only to see it vetoed by Chris Christie each time.

You ask me, Sweeney is just playing standard New Jersey politics. He knows Murphy needs the millionaire’s tax more than anything, and he’s going to make Murphy pay one way or another.

Meantime, while the budget hole gets filled and Sweeney gets his political payback, Murphy’s agenda will sit idle. “Tax Bill Could Derail Promises Made By New Jersey’s Next Governor” was the headline on that Times story referenced above. Already, the “accomplished little” drum is beating.

But Dworkin isn’t so fast to count Murphy out just yet.

“I am of the view that Phil Murphy gave us priorities more than he gave his promises,” he said. “Everything was always, ‘we’re going to make the pension payments as soon as we can. We’re going to fully fund schools, but it won’t happen overnight.’ There was always a hedge when he was describing it. Look at New York Times interview a few days before the election. {Murphy said, “I’ve also been crystal clear that some of that stuff we’re going to have to grow into”} Not everything is going to happen in the first two years. People heard promises, but he didn’t give them.”

Dworkin thinks school funding — read, property tax relief — will be the first item Murphy successfully tackles, and he’ll do it the old-fashioned way: Moving money around, a few one-shot deals, a few cuts in other places.

But Dworkin expects little to happen at first.

“Basically, before Murphy spends one dime on new initiatives, he’s going to need almost a billion dollars to balance the budget,” Dworkin said.

I can practically smell the fishbowl fire from here.