An ongoing COVID-19 pandemic, with its rising death toll and statewide shutdowns, has toughened New Jersey residents and reinforced the need for economic policies that strengthen the middle class and small businesses, Gov. Phil Murphy said during his annual State of the State address on Tuesday.
Pre-recorded inside an empty theater instead of live before a joint session of the Legislature at the State House in Trenton, Murphy’s speech came as the governor and his administration continue to battle the health crisis and the economic downturn it has triggered.
Murphy, a first-term Democrat who faces reelection later this year, roundly praised his administration’s response to the pandemic and ongoing efforts to vaccinate residents. Moving quickly to other topics, he used much of the more than 30-minute speech to highlight other policies enacted since he took office in early 2018.
They included an increased minimum wage, recently reformed corporate tax-incentive programs and the establishment of a more transparent health care system in New Jersey. He also underscored efforts to promote more clean-energy production, increase public-education funding and improve mass transit.
“Although wounded deeply, we enter 2021 tougher than ever, wiser than before, and ready to move forward together,” he said.
Not everyone agreed with the governor’s assessment. They included Republican lawmakers and other GOP officials who faulted major elements of the governor’s response to the pandemic, including his handling of nursing homes and the economy.
Meanwhile, reactions from business groups were mixed. They found some reason for optimism, but also aired concerns about the continued plight of small businesses and increased taxes and borrowing.
Senate Minority Leader Tom Kean (R-Union) called on the governor to “be willing to work in a bipartisan manner with the Legislature,” suggesting such an approach could have delivered better results.
“We could have prevented the policy failures that led to unnecessary deaths in our nursing and veterans’ homes, the closure of nearly one-third of New Jersey’s small businesses, and the unemployment of nearly two million New Jerseyans,” Kean said.
This State of the State address comes nearly a year after the first coronavirus cases were detected in New Jersey, triggering a response that involved planning for the rationing of ventilators and orders for residents to wear masks. Murphy, in a series of executive orders aimed at slowing the rate of new infections, required widespread restrictions on economic activity, schools and other social activities.
Murphy’s approval rating has soared during the pandemic, positioning him well for this year’s reelection campaign. But many state services faltered over the last year. The unemployment system failed to keep up under crushing demand as the jobless rate soared above 10% and COVID-19 outbreaks forced closures of many Motor Vehicle Commission offices. Both spurred public outrage.
Criticisms related to COVID-19
Murphy has also faced criticism for his administration’s response to the infections at nursing homes, where there have been a significant number of COVID-19 cases and deaths. And on the political front, he and fellow Democrats who control both houses of the Legislature remain gridlocked over how to regulate legalized marijuana use — more than two months after New Jersey voters widely approved adult-use cannabis legalization at the polls.
Among the policy successes Murphy listed during Tuesday’s speech was an ongoing ramp-up to a $15 hourly minimum wage that was triggered by a law he enacted in 2019. The hourly rate increased to $12 for most minimum-wage workers earlier this month, and it is on course to hit $15 by 2024.
Murphy also pointed to a massive, $14.4 billion corporate tax-break bill that was signed into law just last week. The law restored and reformed several tax-incentive programs, and also created new ones to promote things like historic preservation and brownfield redevelopment.
He also highlighted his administration’s efforts to use loans and other programs to support restaurants and other small businesses that have been devastated by the pandemic and the economic restrictions it triggered. The tax-break law also set aside $50 million in funding for small businesses.
“Our small business community is the backbone not only of our local economies, but of our state’s economy. These are the shops and restaurants that turn a town into a community,” he said.
On the pandemic itself, Murphy praised his administration officials’ handling of the health crisis, including an ongoing vaccination effort that he predicted would help residents “begin to see the light on the horizon get a little brighter.”
Optimistic about marijuana
The governor was also optimistic while addressing the marijuana issue, saying he and lawmakers, despite their ongoing impasse, are “on the verge” of passing new laws that will regulate and decriminalize cannabis.
Murphy also focused on the positive while speaking about New Jersey Transit, the state’s beleaguered mass-transit agency, by highlighting things like the increased hiring of engineers and recently secured federal funding for the replacement of a faltering, century-old rail bridge spanning the Hackensack River. The deadline for a nationally mandated installation of new safety equipment was also narrowly met by NJ Transit just last month.
“As New Jersey starts getting back to work, commuters will find that NJ Transit is safer and more accountable,” Murphy said.
On the issue of education, Murphy praised efforts to overcome the so-called digital divide as students and teachers across the state have been forced into remote-learning settings for long stretches.
He said New Jersey’s education system, though stress-tested by the pandemic, has maintained its high ranking among U.S. states. But the governor also conceded, “We have room to do better and to bring more schools, more students, and more communities, under that banner.”
He also recommitted to an ethics-reform package that has remained stalled in the Legislature for roughly a year. But left unmentioned in the speech were his failed efforts to create a public bank despite it being an oft-repeated policy goal during his 2017 campaign.
And in a likely nod to the political contests that will come later this year as Murphy and all 120 seats in the Legislature will be on the November ballot, the governor pushed back preemptively against calls for reduced taxes and spending.
Last year, Murphy faced widespread criticism from Republicans for hiking taxes, including on millionaires, and borrowing billions of dollars without voter approval, to sustain a year-over-year spending increase.
“Our long-standing inequities have never been felt more sharply than during the past ten months,” Murphy said. “To blunt them, we must accept the fact that we can’t grow and strengthen the middle class by pulling the rug out from under it — and that we can’t cut and slash our way to growth and opportunity.”
But in a response delivered online after the speech ended, Assembly Minority Leader Jon Bramnick (R-Union) strongly disagreed. Instead, Bramnick faulted Murphy for enacting dozens of tax hikes that he suggested were causing residents and businesses to flee the state.
“This is why it’s so important that we start to move away from raising taxes,” Bramnick said.
Bramnick’s measured response
Bramnick took pains to criticize Murphy’s polices in a measured way, stressing their disagreements are not personal as he spoke less than a week after an angry mob incited by President Donald Trump attacked the U.S. Capitol in an unsuccessful bid to stop the formal certification of last year’s presidential election results.
“Let me be clear: I respect Gov. Murphy, as a person, and as the governor of the state,” Bramnick said.
In her response, Eileen Kean, state director of the National Federation of Independent Business, a group that represents small and independent businesses, took issue with Murphy’s portrayal of recent efforts to assist New Jersey’s small businesses.
“The governor’s speech had a lot of slick video production, but there wasn’t much there for small businesses,” Kean said in a statement. “As a matter of fact, when he listed his accomplishments, many have been mandates that are harmful to small businesses because they raised the overall cost of doing business.”
However, Murphy’s speech drew praise from public-worker unions and progressive groups that have cautioned against responding to the pandemic with spending cuts and other austerity measures.
“Gov. Phil Murphy — helped by a Legislature that stepped up — made sensible and sound decisions regarding our state’s budget, priorities and the public health,” said Hetty Rosenstein, New Jersey director for the Communications Workers of America labor union.
“The governor and state lawmakers deserve an enormous amount of credit for how they are handling the pandemic, especially considering the lack of leadership by the federal government,” said Brandon McKoy, president of New Jersey Policy Perspective, a left-leaning think tank based in Trenton.