The Democratic-controlled New Jersey Legislature passed a $38.7 billion state budget in defiance of Democratic Gov. Phil Murphy, who is expected to counter by slashing spending added by lawmakers.
Seven Republicans voted with Democrats as the state Senate passed the spending plan 31-6 at the Statehouse in Trenton. The state Assembly voted 53-24 Thursday afternoon, without any GOP support.
In their budget for the fiscal year beginning July 1, lawmakers jettisoned the tax hikes on millionaires, gun owners, opioid manufacturers, bear hunters and corporations in New Jersey that Murphy had sought to increase funding for tuition-free community college, K-12 education, public-worker pensions and NJ Transit.
They kept only the Democratic governor’s proposed tax increase on HMOs, while dipping into reserves, cutting spending and raising Murphy’s revenue estimates to balance the budget.
At the same time, legislators want to spend another $50 million on NJ Transit, $50 million for extraordinary special education, $65 million to pay for wage increases for direct-service providers who work with people with disabilities or at subsidized child care centers, and $48 million to study school consolidation and municipal shared services.
They added tens of millions of dollars for local pet projects, hospitals and nonprofit organizations, like Boys and Girls Clubs of New Jersey and the Count Basie Center for the Arts.
The budget (S2020) contributes $3.8 billion to the public-worker pension system and increases K-12 school funding formula aid by more than $200 million.
“Our budget is fiscally responsible with a healthy surplus. Our budget funds our priorities and the governor’s priorities,” said Assemblywoman Eliana Pintor Marin, D-Essex, chairwoman of the budget committee.
While conceding the Legislature’s budget contained funding for most of his priorities, Murphy reprimanded lawmakers for pruning funding to expand tuition-free community college, calling the cut “indefensible and needless.”
The progressive governor said that by refusing to increase gun licensing fees, “dog licenses will continue to cost more than gun licenses across New Jersey.” He said by rejecting a $150-per-head tax on businesses that don’t provide health care and whose employees are, as a result, enrolled in Medicaid, they’re “making every New Jersey family foot the cost for the benefits these large corporations do not provide to their workers.”
The Legislature’s budget also is without the millionaires tax — a 10.75 percent top marginal tax rate on income over $1 million — that would have generated $536 million next year.
State Senate Stephen Sweeney, D-Gloucester, and Assembly Speaker Craig Coughlin, D-Middlesex, have stood firmly opposed to the millionaires tax, saying the budget could be balanced without it and they would not consider raising taxes without carrying out reforms to rein in state and local spending.
Murphy accused the leaders of replacing a popular tax increase with “voodoo” and “fuzzy math.”
“There are revenues included in your budget that I will have difficulty certifying,” the governor said in a letter to lawmakers Wednesday.
The budget they approved Thursday assumes the state will collect $175 million more in corporate business and insurance premium taxes than the state Treasury Department projected and $100 million more from a repatriation of foreign dividends.
Murphy plainly threatened to line-item veto lawmakers’ added spending in that letter, writing “If this budget contains the revenue for your added spending, I will work with you. But if not, I will be forced to take corrective action.”
Sweeney has said lawmakers will contemplate overriding the governor if he issues any line-item vetoes that cut spending important to members.
“I think we gave him a good, solid budget,” he’s said. “If he line-item vetoes things out, it’s just out of spite. Because the revenues are there.”
Assembly Minority Leader Jon Bramnick, R-Union, said New Jersey is on “a crash course with bankruptcy,” and his caucus would not cast votes for a budget that “does not address any of the serious structural problems.”
Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus.
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