Within minutes of Gov. Phil Murphy’s budget address in March, Democratic legislative leaders reacted mildly, characterizing the spending recommendations as a first step in the process while expressing quiet dismay over the proposal to increase the state tax on incomes over $1 million.
The rather muted reaction was quickly interpreted as a glimmer of hope, a sign that compromise was in the air, that the rancor that surrounded budget deliberations last year could be avoided and the principals stood ready to hold hands around the campfire and hum a happy tune.
That was then; this is now.
Senate President Steve Sweeney (D-Gloucester) has ratcheted up the rhetoric, expressing his opposition to the millionaire’s tax in considerably more blunt language, describing Murphy’s latest offer to appropriate $250 million more to property-tax relief efforts in return for approval of the tax increase as “a gimmick” that the governor was using as a prop to support his budget request.
Assembly Speaker Craig Coughlin (D-Middlesex) joined Sweeney in opposing the governor’s plan, sealing its fate and increasing the likelihood of another shutdown crisis.
The conflict over the budget has been compounded by a harsh and deeply personal attack on the governor by South Jersey powerbroker George Norcross who was thrust into a whirlwind of accusations that he, his business acquaintances and allies had used political influence to win approval of hundreds of millions of dollars in tax incentives from the state’s Economic Development Authority.
An unprecedented outburst
Norcross, long the most powerful voice in South Jersey politics, stunned observers with an unprecedented attack on the governor and the governor’s wife. He described Murphy as “politically incompetent” and accused him of pursuing a vendetta to destroy him, Sweeney and other South Jersey political figures through using a task force appointed by the governor to scrutinize the findings of an audit of the EDA. The audit claimed the agency reached decisions based on political favoritism, much of it involving projects connected to Norcross. It alleged further that some applications were incomplete and there had been little if any follow-up to determine if the job-creation requirements were achieved.
Norcross characterized the task force as a “McCarthy like” panel created to smear the governor’s critics and contemptuously ridiculed Murphy as “the King of England” and his wife as “the Queen of England.”
Murphy may be fair game, but dissing his wife was a less than brilliant move by Norcross, suggesting he is, perhaps, more nervous than he wishes to let on and his anger overruled his normally sound judgment.
Norcross predicted Murphy would face a primary election challenge should he decide to seek a second term in 2021, a challenge that he would support enthusiastically. There is considerable dislike in the party for Murphy, according to Norcross, and a primary opponent or opponents is a virtual certainty.
In the days leading up to Norcross’ public attack, a well-orchestrated public relations effort was begun, using Camden County and City officials as spokespersons to defend the tax-incentive program as crucial to the economic recovery of the region.
The strategy quickly turned to harsh and intense criticism of the governor, much of it similar to the derisive comments made by Norcross.
Big guns defend Norcross
Two former governors — Jon Corzine and Chris Christie — came to Norcross’ defense as well and Sens. Cory Booker and Robert Menendez, both of whom complimented him on his efforts to revitalize Camden.
That Norcross chose to insert himself into the controversy in such a highly visible fashion is an indication of the seriousness with which he views the challenge represented by information developed by the task force.
While he is the unquestioned political leader in South Jersey, he has largely stayed out of the spotlight, preferring to exert his influence privately. His decision to speak publicly and with such fierce contempt for the governor surprised many but was clearly an indication that he felt his direct involvement was necessary to blunt the suggestions of impropriety directed at him.
It is no longer merely a disagreement over policy or a line item in the budget; it has escalated to an all-out war which will overwhelm both the executive and Legislature and create a breach which will likely never be healed.
The ill will and struggle for power will most certainly impact already testy budget deliberations, putting an abrupt end to the era of good feelings detected back in March and suggesting a public bloodletting the likes of which haven’t been seen before.
Much like last year, Murphy has laid down his marker in support of the tax increase while Sweeney has promised it will not be included in the budget adopted by the Legislature.
Murphy backed down on millionaire’s tax last year
The governor eventually backed down last year, settling for a dramatically scaled-back version of the tax, understanding that a budget impasse would lead to a government shutdown for which he’d bear the lion’s share of the blame.
By tying the tax increase this time around to an increase in the homestead rebate and senior-freeze programs, Murphy hoped to touch a legislative nerve on the issue which has bedeviled administrations and legislatures for years — the state’s historic high property taxes.
He has attempted to frame the debate as a contest between wealthy taxpayers — who he contends are able to easily afford a small tax increase — and middle-income New Jerseyans suffering under increasingly burdensome property taxes.
He’s chosen sides in this contest and he wants the Legislature to do the same. His message — protecting the wealthy comes at the expense of those struggling economically — has resonance, particularly in a year when the 80-member Assembly is standing for election.
He believes the pressure to act will be too great for many incumbents to withstand.
Property taxes, dominant issue
Off-year elections when the Assembly leads the ballot produce notoriously low turnouts and, lacking any overarching issue, property taxes and the need to control and ease them, will dominate the campaigns.
Voters can expect to hear the number $8,797, the average property-tax bill in New Jersey, the highest in the nation, in campaign advertising and read candidates’ mailers pledging to provide relief.
By describing the millionaire’s tax as a gimmick, Sweeney argues that the revenue is subject to the uncertainties of shifting economic conditions and that systemic changes in tax and spending policies are essential to place the state on a stable footing.
He has touted his “Path to Progress” study and recommendations as a sound, reliable approach for the long term, including major changes in the state’s public pension and health benefits system, extensive school-district consolidation and imposing tolls on state roads.
A handful of legislators have expressed support for the millionaire’s tax, although it’s unclear whether their view will spread through the Democratic caucuses.
Legislators are not anxious for a repeat of last year’s shutdown brinksmanship and there is no appetite for another public swapping of harsh — often personal — language. Placing blame and questioning motives only heightens intra-party divisions while creating serious doubts about whether Democrats are capable of applying unified partisan government effectively.
Murphy has thus far stood his ground, insisting that his proposal for a millionaire’s tax increase is vital and contending he had no choice but to appoint a task force to investigate what he said were deeply troubling findings in the EDA audit.
None of it may matter, though. So much has already been said, so much deep-seated animosity has spilled out into the public that the next two and one-half years of Murphy’s first term will be marked by paralysis rather than progress.
Norcross, by suggesting a challenge to Murphy in 2021, teed up a contest which will surely set records for a level of viciousness, rancor and spite that will sorely test the patience and tolerance of voters who’ve become immune to mudslinging and accept it as a normal part of politics.
In two years, they may experience something that will shock the hardened sensibilities of even the most cynical voters. It will also personify the observation of the Greek playwright Aeschylus: “In war, truth is the first casualty.” Make no mistake, this is war.