Lawmakers: lame duck session must tackle affordability, taxes

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State legislators from both major parties argue that bruising defeats and narrow victories among Democrats represent a voter mandate that over the 54 days of the lame duck session they must address long-standing issues of taxation and the cost of living.

Gov. Phil Murphy, a Democrat, won reelection in an unexpectedly close race against Republican former state Assemblyman Jack Ciattarelli. Murphy’s party lost six seats in the state Assembly and one in the Senate, giving them their narrowest majorities in nearly two decades.

Most shocking of all was the loss of Senate President Stephen Sweeney, a powerbroker from South Jersey and the state Legislature’s most powerful member, to career truck driver Republican Ed Durr.

“I think no matter what stripe you wear, the electorate told us that affordability and also efficiency of government is essential, and things we need to be mindful of as state legislators,” Sen. Troy Singleton, D-7th District, said during Nov. 17 panel at the New Jersey League of Municipalities convention in Atlantic City.

Assembly Speaker Craig Coughlin, D-19th District, agreed, saying that affordability needs to be “at the top” of what lawmakers focus on, meaning significant tax reform and “working for a plan that recognizes those shared middle class values that we champion all the time.”

Sweeney was notably absent from the League event, billed as the “Legislative Leaders” panel. He will be replaced as the Senate’s top leader by Sen. Nicholas Scutari, D-22nd District.

The state has some of the highest property taxes, income tax and corporate business tax rates in the nation. New Jersey imposes an 11.5% top corporate tax rate and a “millionaire’s tax” of 10.75% on every dollar earned above $1 million, one of the highest rates in the nation.

Murphy nonetheless has defended his progressive agenda and economic track record.

“We’re pragmatic, pro-growth progressives,” the governor said earlier this month at an event in New Brunswick. The implication “that all we focus on is fairer,” the governor continued, is not true. “The stronger part means growing the economy, and we’re equally committed.”

Ciattarelli frequently attacked Murphy over issues such as taxes, the high cost of living and doing business, and overall affordability for both businesses and residents in the state. His campaign ads repeated a 2019 clip of a Murphy comment at Rowan University that “if you’re a one issue voter and the tax rate is your issue, we’re probably not your state.”’

“Who says that?” Ciattarelli often said in the ads.

Once the dust settled after the election, Republicans contended the state was not as deep blue and solidly Democratic as had been previously thought.

Two Republican leaders – Assembly Republican Leader Jon Bramnick and Senate Republican Leader Tom Kean, both Republicans from the 21st Legislative District – didn’t hold back those views during the discussion.

“The thing that I would like to focus on is … affordability and high property taxes. Those are the things that people across New Jersey sent a very strong message on,” said Kean, who is retiring from the legislature to reportedly take on U.S. Rep. Tom Malinowski. Bramnick will move up to the state Senate as the next Senate GOP Leader.

How exactly the state brings about affordability and lowers taxes is a matter of fierce academic and political debate.

Bramnick, for example, argued that the state needs to rein in its annual budget expansions, though not necessarily by instituting the 2% cap limiting municipal budgets increases.

The most recent budget was $46 billion, while the first budget Murphy signed in 2018 was $37.4 billion, a nearly 23% increase.

“Unless you put Trenton on some sort of diet, we will continue to spend,” Bramnick said, which Singleton agreed with.

Kean floated the idea of a charitable deduction for state income taxes. On the campaign trail, Ciattarelli proposed cutting the corporate tax rate by half over the next five years, and the adoption of Delaware’s lenient corporate laws. He also promised major cuts from the state budget, but did not indicate what would be on the chopping block.

“There needed to be more details” on proposals like auditing the state agencies to cut down on overspending, and proposals like “reducing red tape and regulations for businesses,” Ralph Albert Thomas, president and chief executive officer of the state’s accounting trade group the New Jersey Society of CPAs, said in an interview last month.

He continued: “There was a lot of talk about cutting the corporate tax rate, but then what’s the alternative to that? What has to go? You can’t say we aren’t going to raise taxes each year” given the “cost of the budget.”