Status quo

Gov. Phil Murphy and former state Assemblyman Jack Ciattarelli during the gubernatorial debate at New Jersey Performing Arts Center on Sept. 28, 2021. – DANIEL J. MUNOZ

While the first ever gubernatorial debate was light on details about the direction of New Jersey’s economy and the state of its business climate, the event still left business groups somewhat confident and assured. That’s because of a key promise made by the incumbent Democratic Gov. Phil Murphy: no new taxes.

“I pledge to not raise taxes,” he said during an hour-long Sept. 28 debate against his Republican challenger, former state Assemblyman Jack Ciattarelli. The governor insisted throughout the evening and during his twice-a-week COVID-19 press conference the next day that he had made the vow before.

In the past nearly four years, the governor and state Legislature raised taxes those earning above $1 million a year and some highly profitable businesses.

“I can tell you that one single comment was something the business community was extremely pleased to hear,” said Tom Bracken, who heads the New Jersey Chamber of Commerce. “Now I guess you have to hold him to his word.”

Ciattarelli, who represented a Somerset County district for three terms, had repeatedly hammered Murphy during the campaign on a clip from October 2019, in which Murphy said “if you’re a one-issue voter and tax rate is your issue, we’re probably not your state.”

“Who says that?” Ciattarelli typically responds in his campaign ads.

But for many other business groups, such as the New Jersey Society of Certified Professional Accountants, Murphy’s tax-pledge was welcome.

Thomas

“They’ve always launched at the business community to make up the deficits and the shortfalls,” said Ralph Albert Thomas, the group’s chief executive officer and executive director.

But the future is unpredictable and any number of scenarios could leave the state in need of more cash. “We don’t know if there’s going to be a new pandemic, some kind of recession,” said Ben Dworkin, who heads the Rowan Institute for Public Policy and Citizenship. “The state coffers are full right now. We’ll have to see where they are over the next four years in order to know whether that kind of pledge was wise or foolish.”

Murphy nonetheless has stuck to the pledge in recent days. “We’re done with that,” he said of tax increases. “That should show a confidence that we have really bright days in front of us.”

But beyond that key promise, Thomas said both candidates offered relatively few on details on the affordability issue and the state’s overall business climate. For example, the state needs to significantly cut down on its “unfunded debt.”

“Cutting the corporate tax rate, improving infrastructure, auditing state agencies, that’s always been areas we can save or reduce costs,” he said in an interview.

Ciattarelli’s campaign platform includes a provision that would make the first $50,000 of business income tax-free and cut the corporate tax rate in half over the next five years. And he would “adopt Delaware’s business-friendly by-laws,” according to his website.

At a news conference immediately following the debate, the Republican candidate stuck to those three talking points, which he noted were available on his website. He would also propose cutting some of the capital gains taxes for smaller businesses, make retirement income and the first $20,000 of personal income tax-free, and expand the child tax credit.

“They didn’t really focus much about the details,” Bracken said. “Murphy talked about stronger and fairer … Ciattarelli talked about his plans for making us a much more competitive state and the go-to place for businesses.”

Both candidates are scheduled to face off again on Oct. 12 at Rowan University.

For now, the incumbent governor has a “comfortable lead” over Ciattarelli, according to John Froonjian, who heads the William J. Hughes Center for Public Policy at Stockton University. Stockton released a poll on Sept. 29, the day after the debate, showing Murphy with a nine-point lead over Ciattarelli. A poll from Monmouth University released earlier in September showed the governor with a 13-point lead, down from 16 points in a previous poll.

But according to Patrick Murray, who heads the Monmouth University Polling Institute, the narrowing lead was most likely from already-established Republicans “galvanizing” behind Cittarelli, rather than voters being swayed toward the Republican candidate.

Both polls showed that Ciattarelli struggled with name recognitio among voters, meaning that many respondents simply hadn’t heard of him. But among those who did know about Ciattarelli, more of them said he would likely do a better job than Murphy on topics such as taxes, small businesses and the economy.

“Murphy wants this to be a choice between going forward and going back,” Dworkin said of how each candidate was framing the race. “Ciattarelli wants this to be a referendum about thumbs up or thumbs down for Murphy.”