Gov. Murphy’s ‘Scary’ and ‘Extreme’ Fiscal Policies

John Reitmeyer | May 9, 2018 | Politics
Assembly Minority Leader Bramnick suggests even Democratic lawmakers will be hard pressed to back the governor’s budget plan and call for higher taxes

“Scary” and “extreme” are the words Assembly Minority Leader Jon Bramnick (R-Union) repeatedly used yesterday to describe Gov. Phil Murphy’s plan to hike taxes and increase spending. Talking to reporters, Bramnick said Murphy’s fiscal policies are putting Democratic lawmakers in a difficult spot with New Jersey’s tax-weary voters.

“It’s just a matter of time before the public goes, ‘You know something, maybe we should give a chance to the other side,’” Bramnick said, alluding to next year’s midterm election. “That’s how it works.”

It’s not surprising that Republicans like Bramnick don’t see eye to eye with Murphy when it comes to the state budget. But there’s also been an unwillingness among Democrats to accept the governor’s call for higher taxes. That’s given the GOP an opening to draw a more direct a contrast between their approach and the governor’s.

Putting the pressure on

For example, while Murphy is calling for a significant spending increase, Senate Minority Leader Tom Kean Jr. (R-Union) has proposed a measure that would limit yearly state spending hikes to a modest 2 percent. Meanwhile, Bramnick is backing legislation that would force lawmakers to say whether they agree with Murphy’s call to break a bipartisan deal from just a few years ago that increased the state gas tax in exchange for a slight reduction of the sales tax. The GOP bills are unlikely to win passage in the Democratic-controlled Legislature, but they do underscore the pressure the Republicans want to put on Democratic lawmakers in the runup to the June 30 deadline for a new state budget.

“It’s hard for me to understand how the Democrats can come to terms with the extreme and scary, tax-filled agenda of the governor,” Bramnick said.

In all, Murphy’s $37.4 billion budget plan for fiscal 2019 would increase state spending by nearly 8 percent, compared with the budget for the current fiscal year, which was enacted by former Gov. Chris Christie. A major chunk of the increase would go to the grossly underfunded public-employee pension system. Other increases are planned for K-12 education, public preschool, college-tuition assistance programs, and New Jersey Transit.

To bring in new revenue, Murphy is proposing to establish a 10.75 percent top-end income-tax rate on earnings over $1 million. Right now, the top-end rate is 8.97 percent, assessed on earnings over $500,000. Murphy also wants to reinstate the 7 percent sales-tax rate that was in place for a decade until Christie convinced lawmakers to lower it in 2016, in exchange for signing off on the gas-tax hike. Murphy’s budget proposal also proposes new corporate-tax rules to raise additional revenue, and new taxes on “sharing-economy” services like Uber and Airbnb would also be levied. In all, the tax hikes would yield close to $1.7 billion in new revenue.

Frustrated with cost of living

Speaking about Murphy’s budget proposals yesterday, Bramnick said New Jersey residents are already frustrated with the state’s high cost of living. Adding insult to injury, he suggested, was Murphy’s recent decision to ink a new deal with the union that represents the largest group of state workers — without getting any real concessions from labor leaders. That decision also came as Murphy’s budget carries on a cut in funding for the state’s popular Homestead property-tax relief program, though that’s something Assembly Speaker Craig Coughlin (D-Middlesex) has already promised will be reversed.

It’s the cumulative impact of Murphy’s proposals, from the tax hikes to his promise to eventually provide free community college to students across the state, that is leading many of his constituents to say they are ready to leave New Jersey, Bramnick said.

“I’m just hoping we don’t scare everybody out of this state,” he said.

While Democratic legislative leaders so far have refused to embrace Murphy’s call for higher taxes, there is a sense in Trenton that they will eventually acquiesce, at least to some degree. If they do, that will likely prompt Republicans to do everything they can to make sure voters remember who to blame in 2019.

For example, Murphy has called the slight reduction of the sales tax — from 7 percent to 6.625 percent — a “gimmick” that was designed to give the Republican Christie a political talking point. But the lower sales tax is now saving taxpayers an estimated $581 million, and the 2016 tax legislation included a “poison pill” that was designed to protect the bipartisan deal by requiring the gas-tax hike to be repealed if any of the tax cuts that went along with it are eventually reversed.

Bramnick doesn’t want this year’s possible undoing of the 2016 tax deal to get muddied up in obscure budget language, which could be used to get around the poison pill. He’s calling for there to be a separate vote held in the State House that puts every lawmaker on record, giving New Jersey voters a chance to know exactly who reneges on the bipartisan agreement.

“You can call it whatever you want, but it did lower taxes,” Bramnick said. “It may not have had a significant effect, but it was a lowering of some tax, which is never easy in this state.”

He also suggested that it’s Democratic lawmakers who have the most to lose next fall when voters will be casting their ballots in the first midterm election of Murphy’s tenure.

“We know from all the polling that the pocketbook issues are the most important,” he said.