Democrats urge wait-and-see approach to Murphy’s budget

TRENTON » New Jersey Gov. Phil Murphy’s budget proposal to raise taxes and increase spending contrasts sharply with his Republican predecessor, Chris Christie, and President Donald Trump, but Democrats aren’t cheering.

Murphy, a Democrat, unveiled the $37.4 billion spending blueprint Tuesday and defended it Wednesday during a radio call-in show on WNYC.

The plan increases spending on education and the pension payment and finances the increases by raising income taxes on millionaires and hiking the sales tax. The plan also relies on $60 million in anticipated revenue from marijuana legalization.

The proposal largely reflects what Murphy campaigned on, backed by the Democratic establishment.

But the Democrat-led Legislature was tepid in response, particularly on raising the income tax rate from 8.97 percent to 10.75 percent on incomes over $1 million.

“I think it’s irresponsible for us to make a kneejerk reaction to any one proposal from a revenue standpoint without knowing its implications,” said Assembly Majority Leader Louis Greenwald.

The Democratic Senate president and the Assembly speaker addressed the proposal in statements, rather than in person, a departure from previous years. Far from embracing his proposals, many of which lawmakers themselves pushed before, Democrats promised to review the budget.

Murphy on Wednesday downplayed any potential divisions, saying he thought Democrats would “prove to be the party of substance.”

He also seemed to dismiss attacks on the budget from Republicans, who said he was a retread of former Democratic Gov. Jim Florio, who raised taxes and lost reelection.

“I am not here worrying about my next election,” Murphy said. “I got elected to do what’s right in New Jersey.”

Experts said the lukewarm Democratic response to Murphy’s proposal reflects party leaders’ different priorities.

“They want to show the voting public they’re all on the same team but in fact they all have competing interests and competing priorities and a different sense about how to go about things,” said Peter Woolley, a politics professor at Fairleigh Dickinson University.

Senate President Steve Sweeney has said he’s reluctant to impose a millionaire’s tax because of the new federal tax law, which caps state and local tax deductions. They’re a big factor in high-property-tax New Jersey where two-fifths of federal tax filers deducted those taxes.

Assembly Speaker Craig Coughlin has kicked off his speakership, which began this year, saying he wants to focus on hunger and poverty issues. Aside from that, New Jersey lawmakers are traditionally fractured along north-south lines that can sway legislative outcomes.

Layered on top of that is a perennial concern that New Jersey is among the costliest states to live in, with high property taxes, and that raising taxes could hurt competitiveness.

Murphy argues his millionaire’s tax targets the wealthy who can afford to pay while the sales tax change from 6.625 percent to 7 percent would likely be imperceptible for most residents.

Republican Senate Minority Leader Tom Kean Jr. called that attitude “callous.”

Murphy said he sees the tax and spending increases as restoring New Jersey’s “value,” which he views as having declined over eight years under Christie.

Democratic lawmakers might be cautious about the plan, but elements of the progressive base are enthusiastic about it.

Better Choices for New Jersey, an umbrella group that includes labor, environmental groups and liberal advocacy groups, held an event Wednesday in Trenton to support the budget.

Hetty Rosenstein, the state director of Communications Workers of America, which represents state workers, praised Murphy on Tuesday.

“This is a good first budget,” she said.

The budget will now wind its way through the Legislature ahead of a June 30 deadline to enact a balanced spending plan.

Julie Roginsky, a Democratic strategist who’s worked for Murphy and Coughlin, said Murphy made his case clearly.

“The Democrats in the legislature will now turn to crafting a budget that reflects their values and priorities,” she said.