Shortly after Gov. Phil Murphy finished his second annual State of the State address, critics bemoaned a lack of any clear path forward on taxes and affordability, environmental issues and New Jersey’s economic incentives. Supporters backed many of his policy priorities, most of which at the Jan. 14 address were well-known in Trenton.
Murphy, flanked by the state Legislature’s top two Democrats – Assembly Speaker Craig Coughlin, D-19th District and Senate President Stephen Sweeney, D-3rd District – vowed to have another go at a millionaire’s tax, twice blocked in the state Legislature and with no improvement in its prospects during this third round.
“The millionaires and corporate CEOs made out just fine in the last recession – and, I assure you, they will again when the next one hits,” Murphy said.
He called for an agreement on a new tax incentive program, something the state has lacked for over six months. But those incentives need to build in “greater transparency and safeguards, and commonsense caps,” Murphy said.
“We now know that some companies received tax credits they did not deserve and took credit for jobs they did not create,” the governor added. “They didn’t just hurt their own reputations, they hurt the reputations of the many more good corporate actors who have done exactly what they said they would.”
Sweeney and Coughlin have opposed the millionaire’s tax, and are skeptical that caps to the incentive program would make sense. Neither was available for comment following the speech.
Business groups were not so reticent. “In Gov. Phil Murphy’s State of the State address today, he continued to promote his vision of a ‘fairer and stronger’ economy,” New Jersey Chamber of Commerce President and Chief Executive Officer Tom Bracken said in a Jan. 14 statement. “While we can all support the concept of a ‘fairer and stronger’ economy, the social programs that comprise the ‘fairer’ economy must be paid for by the economic progress of a stronger business climate.”
“New taxes of any kind will not address or solve New Jersey’s structural challenges. We simply cannot tax ourselves out of our pension liability and post-employment benefit obligations,” NJBIA President and CEO Michele Siekerka in a statement after the address. “New Jersey desperately needs a commitment to impactful fiscal reforms to ensure a stable future, instead of continued, excessive taxation heaped upon overburdened residents and businesses.”
“Unfortunately, the Governor neglected to address the state’s affordability crisis, which makes a business’ ability to succeed in N.J. next to impossible, and made a renewed call for a millionaire’s tax, which directly impacts residents and small businesses alike,” said CCSNJ President and CEO Christina Renna.
Republican lawmakers, who’ve been critical of Murphy and Democratic lawmakers, decried what they saw as the governor’s inattentiveness to the issue of the state’s affordability.
“When the governor came out he was excited and in his normal course he jumps up and down, and he’s totally committed to what he’s going to say, he’s very happy. I’m just not sure the people of New Jersey are that excited,” Assembly Minority Leader Jon Bramnick, R-21st District, said at a news conference following the address.
“Time is up. The ball’s in your court,” Bramnick added. ”Take responsibility and tell people why they shouldn’t move. Tell people why this is the place you should bring your business. Give us a reason why you should not move to Florida. Tell us what you’re going to do to lower the cost of living in the state.”
Support from progressives
Many progressive groups backed Murphy’s push for a millionaire’s tax, as well as his proposed reforms to the state’s economic incentive programs, including New Jersey Policy Perspective, New Jersey Working Families, New Jersey Citizen Action and 32BJ SEIU, a union which represents several thousand service workers in the state.
“Governor Murphy took office promising to change the culture in Trenton, and the bold ethics proposals he outlined today will help ensure that state government serves working families – and not powerful special interests,” Working Families State Director Sue Altman said on Jan. 14.
Governor Murphy took offi ce promising to change the culture in Trenton, and the bold ethics proposals he outlined today will help ensure that state government serves working
families – and not powerful special interests.
– Sue Altman, Working Families state director
“We also call on legislative leaders to listen to the governor and enact the necessary reforms to the state’s broken tax incentives program to ensure that it works to benefit working families and not politically connected businesses.”
The progressive think tank New Jersey Policy Perspective applauded the governor’s plan to appoint a task force that would examine “wealth disparity” experienced by the state’s black and Latino residents.
“As New Jersey works through the challenges created by the Great Recession, delivering a stronger economy for all requires authentically centering racial and gender equity,” said NJPP President Brandon McKoy in a Jan. 14 statement.
Looking on the bright side
Murphy listed a series of what he sees as his accomplishments over the past year, including improvements at New Jersey Transit. Since he took office, the rail and bus agency has invested hundreds of millions of dollars in rolling stock such as rail cars, locomotive engines and buses and expanded its training classes for engineers, Murphy said. He also plans to unveil a 10-year strategic plan and five-year capital plan in the coming weeks.
“At the end of the day, we still must answer to the commuter whose train was cancelled, or whose bus is over capacity,” Murphy said. “I won’t be happy until we bat 1.000.”
“The governor’s announcement today furthers that effort by ensuring the agency has the resources and the proper plan necessary to grow and expand for the years to come,” Assemblyman John McKeon, D-27th District, responded in a statement. “For the first time in the agency’s history, NJ Transit will have a 10-year strategic and a 5-year capital plan.”
Murphy also cited social justice efforts his administration has made over the past two years: marijuana expungement, driver’s licenses for undocumented immigrants and nearly $10 million of Title X funding for Planned Parenthood.
And the governor highlighted environmental protection policies, such as an energy master plan to be unveiled in the coming weeks, which will map out how the state can produce 100 percent clean energy by 2050. Murphy called for the approval of a November ballot question that would allow the state to borrow $500 million for lead remediation, a price tag that environmentalists like New Jersey Sierra Club have indicated could be in the billions of dollars.
“Funding for lead service line replacements and lead paint remediation is a critical next step to implement the governor’s comprehensive statewide plan on lead,” said Peter Kasabach, executive director of New Jersey Future.
The organization released a report in October showing that the process of replacing lead pipes and paint across the state could take up to a decade and cost upward of $2 billion.
On the economy, the governor announced a new program called “Jobs NJ,” to ensure the state’s workforce is prepared, and employable, in the event of another recession.
Much of New Jersey fell behind following the 2008 recession because “we were stuck in an old-fashioned belief that when a job is lost in a recession, all a worker has to do is wait things out and get it back once the economy recovers,” Murphy said.
“Many of the jobs lost never returned, and more workers were left without the skills necessary for the new jobs that beckoned,” he noted. “We will not repeat this mistake. We will make New Jersey a national leader in welcoming and maintaining the jobs of tomorrow.”
Meanwhile, a new health care watchdog group, called the Office of Health Care Accountability and Transparency, garnered the support of the Medical Society of New Jersey, as well as Sen. Joe Vitale, D-19th District, who chairs the Senate Health, Human Services and Senior Citizens Committee.
“The citizens of New Jersey deserve affordable medical care and should not have to sacrifice quality as work continues on how to best control costs,” Medical Society of New Jersey President Marc Levine said after the address. “Increased transparency and accountability will assist physicians in the delivery of quality care while ensuring patients can afford the services they may require.”