The Murphy administration is releasing the remainder of $121 million in spending from the 2020 budget – part of $235 million the governor froze in June amid intense opposition from lawmakers and accusations of political retribution – arguing that Thursday’s move was justified by strong state monetary performance.
In total, the money that Gov. Phil Murphy froze spanned dozens of items – more than half of which was local aid for the state’s most financially distressed cities – when he signed the $38.7 billion budget on June 30. Murphy also nixed nearly $50 million from the state budget.
The treasury released the first batch of money, $114 million, in October, citing strong budget performances. State Treasurer Elizabeth Maher Muoio said in a Thursday statement that the state is slated to meet all of its revenue targets for December.
Murphy argued that the June decision was necessary because his administration was not certain the revenue and savings projections that the Legislature sent him would pan out, especially without the millionaire’s tax and a host of different fees on corporations. But legislative leadership accused the governor of twisting arms politically since many of the items he froze were related to Cooper University Health Care, where one of Murphy’s biggest political foes is the board chair: South Jersey power broker George Norcross.
Senate President Stephen Sweeney, D-3rd District, an ally of Norcross and also an often-times political opponent of Murphy’s, called the move “Bridgegate on steroids,” and promised in July that he would press the treasury for its rationale behind the freezes.
Cooper Health officials were also highly critical of the move, contending they were deliberately “targeted” by Murphy.
During the first six months of the current fiscal year – July to December – the state collected $2.969 billion from major taxes, which include the sales and use tax, corporate business tax, and income tax. Still, December tax collections were up almost 8 percent from December 2018, according to Treasury data.
“While there is always the risk of a future downturn, we are comfortable that we can maintain this surplus level throughout the remainder of FY 2020,” Muoio said.