Gov. Phil Murphy hinted at nixing key priorities of the budget being presented to him by the Democrat-controlled Legislature this week if it does not include a millionaire’s tax, as well as fees on firearms, ammunition, opioid manufacturers and certain businesses with employees enrolled in Medicaid.
Murphy on Wednesday, in a two-page letter sent to every member of the state Assembly and Senate, did not specifically use the phrase “line-item veto.”
That often-used phrase in talks is a power the governor wields to cut spending proposals out of the budget that lawmakers send him. Both the Assembly and Senate are scheduled to vote on their $38.7 billion budget proposal on Thursday, after which it will head to Murphy’s desk.
“The budget we will be sending the governor tomorrow is fiscally responsible and sustainable. It funds our shared Democratic priorities, provides property tax relief for our most vulnerable citizens, fulfills our debt obligations and provides more than $1.4 billion in surplus funding in the event of a downturn,” Assembly Speaker Craig Coughlin, D-19th District, said in a statement.
“Most importantly, it relies on the same responsible revenue projections that were borne out during the current fiscal year. We believe strongly that this is a fair, responsible budget and believe that the governor will agree once it reaches his desk.”
“To be clear, if this budget contains revenue for your added spending, I will work with you,” Murphy wrote. “But if not, I will be forced to take corrective action. Tax fairness is an issue that will not go away on June 30.”
Senate President Stephen Sweeney, D-3rd District, a key political rival of Murphy, previously shot back that depending on what Murphy cuts, the Legislature can still override the veto.
“If you live up to your letter, we will have a budget in place well before the deadline and the Legislature will have time to evaluate any of your line-item vetoes, in case we need to override them,” Sweeney said in a letter to Murphy later on Wednesday.
This comes as Murphy, at a rally-style press conference on Tuesday with several of his union allies, would not say that he totally ruled out a government shutdown—which he would be required to do under the state constitution if he and lawmakers do not agree on a budget before the June 30 deadline.
On Tuesday, he said only that “all options are on the table,” giving the same response to a question on whether he would sign the budget without a millionaire’s tax.
Murphy’s proposed millionaire’s tax would levy a 10.75 percent rate, up from 8.97 percent, on every dollar earned above $1 million.
The governor pushed for a millionaire’s tax last year, but after meeting resistance from the state Legislature came to a compromise on a “mega-millionaire’s tax” which levied the 10.75 rate on every dollar earned above $5 million.
The Legislature’s Fiscal Year 2020 budget also cuts the $30 million of revenue from the $125 “corporate responsibility” on certain employers whose workers enroll in Medicaid, $1.4 million from the proposed firearms fee, $3.2 million from the proposed ammunition fee and $21.5 million from fees on opioid manufacturers—all moves heavily criticized by Murphy.
Additionally, the budget makes a $28.5 million cut to Murphy’s proposed expansion to a program that provides community college tuition-free for thousands of state residents—Murphy lambasted the move both in the press conference Tuesday and in the letter on Wednesday.
“I would like the people who are cutting that to meet, live and in person, an individual who has benefited from the community college opportunity grant,” Murphy said Tuesday. “It’s a game-changer, unlike any other state in America. Why we would cut it, collectively we, I have no idea.”