Murphy enters 2nd term vowing fiscal responsibility, affordability & tax reform (updated)

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Gov. Phil Murphy is promising a second term focused on fiscal responsibility, greater affordability, a lower cost of living and the potential rein-in of property taxes–all matters that Republicans hammered him on during the election campaign last fall.

Murphy, in his 3,798-word inauguration address delivered on Jan. 18, acknowledged that many New Jerseyans felt that those in power – Democrats controlling both the governor’s seat and state Legislature – hadn’t listened to them enough on those fronts.

A self-proclaimed progressive, and former Goldman Sachs executive, Murphy used his address to promise a “stronger and fairer” state with “an economy that works for every family.”

“It is our duty to get the American Dream working for everyone,” he said at the Trenton War Memorial Theater on Tuesday, where attendance was notably down from Murphy’s first inauguration in January 2018, due to social distancing rules stemming from the COVID-19 omicron variant.

“To make good on the promise that you can do better than your parents and that your kids will do better than you,” he continued. “We can all listen more, including me.”

As the dust settled after an unexpectedly close gubernatorial race against Republican challenger Jack Ciattareli, the state GOP contended that New Jersey is too expensive and public leaders are not listening to constituents.

Democratic leaders, like Assembly Speaker Craig Coughlin, D-19th District, and newly sworn in Senate President Nicholas Scutari, D-22nd District, both acknowledged similar sentiments last week.

“They want a New Jersey that listens to them,” the governor said. “A New Jersey that is more affordable, especially when it comes to three of the biggest expenses facing their family and many others like theirs – health care, higher education, and property taxes.”

The governor noted that property taxes are not set by the state but rather at the municipal level. Still, he said, “the decisions and investments we make directly impact their trajectory.”

Property tax relief, as it’s officially known, comes out of the income tax, including Murphy’s sought-after millionaire’s tax which he got in 2020. “Every dollar of new state funding for our schools and communities, for local roads and libraries, and for countless other areas, is a dollar that stays in your pocket as a property taxpayer,” he said.

Bouncing back

Last week, Murphy touted one metric that suggested a definitive economic rebound: A federal analysis of New Jersey’s quarterly gross domestic product placed the state in the top five for growth compared to the same quarter last year.

But going into his second term the governor faces a state with some of the nation’s highest taxes, including property, income, and the corporate business rate.

New Jersey’s unemployment rate is 6.6%, higher than the national average, while job recovery has lagged. And though the state’s population grew over the last decade, it fell in 2020 and 2021 amid COVID-19.

Tuesday’s address came as the state treks into the third year of the pandemic. Nonetheless, the latest surge has shown signs of waning, with hospitalizations and intensive care patient levels recently dropping.

Murphy assured he would not enact new statewide mandates like the business restrictions seen in 2020 and 2021.

Face coverings are still required in schools, on public transit and in health care settings, while many local governments and businesses have enacted their own restrictions.

“As we continue to work to disperse the dark clouds of COVID that hang over our state, we honor the tremendous sacrifices so many have made in their daily lives to help us return to normal,” the governor said.

Innovation economy

Murphy’s promised no new tax increases in his second term, while in the Legislature Scutari said he intends to scrutinize and chop down “pork spending” or “Christmas tree” items that only benefit a particular lawmaker’s legislative district.

The governor touted his business track record, saying industry is booming in sectors such as clean energy and offshore wind, life sciences and medicine, film and television productions, cannabusiness, and online gaming and sports betting, “which we now dominate.”

 “We’re going to continue growing the innovation economy that will power our future and make us a model for the nation and the world. “Over the past four years, I have attended many groundbreakings for all of the above. In the next four, I look forward to many more ribbon-cuttings.”

The governor highlighted several fiscal reforms of the past four years: the first full pension payment since the 1990’s was made in 2021, he noted, in addition to a number of health care and retirement agreements with the state’s public worker unions that saved “billions of dollars” for the state.

All told, the public worker pension, alone, is unfunded by upwards of $100 billion by some estimates, and was the source of a combined 11 credit downgrades for the state between 2010 and 2018, when former Gov. Chris Christie was in office. In 2011, he opted to suspend cost-of-living-adjustments banked into the pension plan, which was upheld in court in 2016.

The state also has one of the nation’s largest credit card bills at over $44 billion.

Murphy cited his enactment of a millionaire’s tax “that ask those at the top to pay their fair share,” and tax cuts for lower-and-middle-class residents. And, said he plans to introduce a new prescription drug affordability bill to the state Legislature.

“We are lifting up working families and strengthening the middle class while ensuring those at the top do and pay their fair share,” Murphy said.

Editor’s note: This story was updated at 2:05 p.m. EST on Jan. 18, 2021, to include additional remarks and information from Gov. Phil Murphy’s inauguration address.