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View Full Version : As Shutdown Looms, New Jersey Legislature Blasts Governor's "My Way Or The High Way" Budget




Swordsmyth
06-21-2018, 11:01 PM
In what's beginning to sound like a repeat of last year's statewide budget battles that pitted Democratic legislatures against Republican governors in states like Maine, New Jersey and Illinois, the Democrat-controlled New Jersey legislature is trying to jam a plan that would raise taxes on corporations down the throat of the state's fledgling governor, Goldman Sachs alum Phil Murphy.
However, there's one key incongruity here that might raise eyebrows among voters who don't live in the Garden State: Murphy is also a Democrat - yet his tax plan, which would rely on long-term increases in sales taxes as well as a hike on income taxes for the wealthiest individuals, has been resoundingly rejected by lawmakers - including State Senate President Steve Sweeney, who lost out to Murphy in the gubernatorial primary to replace outgoing governor Chris Christie, according to NJ.com. (https://www.nj.com/politics/index.ssf/2018/06/lawmakers_pass_their_own_budget_in_competition_wit .html)
https://www.zerohedge.com/sites/default/files/inline-images/2018.06.21murphy.JPG
The Senate Budget Committee passed the budget bill 8-3 (including two abstentions), and the Assembly Budget Committee passed their bill 9-4. By ignoring the governor's plan and instead moving ahead with its own, the legislature is hoping to send a resounding message to Murphy: "We don't answer to you."

New Jersey lawmakers on Tuesday flexed their muscles in advancing a state spending blueprint that eschews Gov. Phil Murphy's call for income and sales tax increases in favor of higher taxes on the state's largest corporations.
"The bill is hot off the press," state Senate Budget Chairman Paul Sarlo, D-Bergen, announced before that committee voted along party lines on the $36.5 billion state budget that Murphy has already vowed to veto.
Legislative leaders have said they intend to put the budget before the two houses on Thursday, sending the bill to the governor, and with it, a message that the state Legislature doesn't answer to him.
"The Legislature is an independent body. We're equal partners and we're expressing that right now," state Senate President Stephen Sweeney, D-Gloucester, told reporters at the Statehouse Tuesday. "The Legislature is not going to accept 'my way or the highway' talking. We're not subservient."
Sweeney and Murphy have exchanged criticisms of their respective plans. Lawmakers criticized Murphy's plan for failing to take advantage of corporations' savings on their federal tax bill as Murphy blasted lawmakers' budget plan as "irresponsible and temporary" - a reference to the fact that lawmaker's tax plan would only last for two years.
But perhaps the most trenchant criticism of the legislature's plan came from Republicans and Democrats who correctly pointed out that the tax hikes on corporations (some of which would be used to help fill the massive funding gap in New Jersey's public-employee pensions) would cement New Jersey's status as the "least friendly state in the US for corporations."


More at: https://www.zerohedge.com/news/2018-06-21/new-jersey-gov-battles-legislature-over-budget-shutdown-looms

Swordsmyth
06-27-2018, 07:18 PM
In his first budget showdown with intransigent lawmakers from his own party, New Jersey Governor (and Goldman Sachs alum) Phil Murphy has made a major concession on his budget plan in a last-minute attempt to work out a compromise that would avert a shutdown of the state government on Saturday.

In a letter circulated to lawmakers, Murphy said that while he's unwilling to accept the legislature's budget - a budget that would raise the state's corporate income tax to the highest level in the country - he'd be willing to work out a compromise plan that included a smaller corporate tax hike and also eliminated a budget shortfall that would've left the state with a $100 million deficit and no emergency reserves, according to NJ.com (https://www.nj.com/politics/index.ssf/2018/06/phil_murphy_offers_tax_hike_deal_to_break_nj_budge .html).

"I remain ... unable to certify that the revenues contained in this budget are sufficient to fund the programs we all support. Failure to provide sufficient funding places all of these programs at risk," Murphy wrote.
"It is not too late for us to bridge this shortfall," he continued.
Murphy offered a more modest increase in the Corporation Business Tax, a smaller increase on taxes on personal income over $1 million and a two-year phase-in of a sales tax hike. Democrats had reportedly discussed similar concessions last week, but those talks ultimately broke down. But despite the opposition, Murphy insists that his new "merged" bill represents a "significant compromise" from his initial plan, which would've restored the sales tax from 6.625% to 7% and would've raised the 8.97% marginal tax rate on gross income over $1 million to 10.75%, and remains the best path forward for the state.
Of course, passing a fiscally responsible budget is more important than ever before for New Jersey, which was forced to "immediately halt state spending and hiring" (https://www.zerohedge.com/news/2018-06-02/new-jersey-abruptly-freezes-spending-it-nears-financial-disaster) earlier this month in a desperate attempt to close out the fiscal year with the state's general fund in the green, as the state's reserve funds have dwindled.
Meanwhile, the proposal passed by Senate President Stephen Sweeney (who lost out to Murphy in the gubernatorial primary) and Assembly Speaker Craig Coughlin would create two new tiers for businesses, levying 11.5% on businesses with net income between $1 million and $25 million while charging 13% on businesses with net income over $25 million. Murphy has insisted that any increase in the business rate must not be large enough to make New Jersey an outlier. Furthermore, any new taxes must be extended for more than two years (the budget passed by the legislature relies mostly on short-term tax hikes). Whether the stalemate ends with a compromise, government shutdown or $855 million in spending cuts should the legislator pass Murphy's budget still remains to be seen. But after a meeting between the two factions yesterday failed to yield any progress, it's looking like this budget battle could go down to the wire.


https://www.zerohedge.com/news/2018-06-27/new-jersey-governor-offers-compromise-budget-state-teeters-brink-shutdown

oyarde
06-27-2018, 07:44 PM
Nobody cares if new jersey has a govt . Shut it down .

specsaregood
06-27-2018, 07:52 PM
Nobody cares if new jersey has a govt . Shut it down .

Yes, please.

Swordsmyth
06-30-2018, 11:49 PM
New Jersey Gov. Phil Murphy and Democratic legislative leaders reached a deal Saturday night on a $37.4 billion budget that hikes taxes on the wealthy and some businesses and averts the state's second consecutive government shutdown. The deal, reached hours ahead of a midnight deadline, helped the government avoid a shutdown. The Democratic governor announced the deal with Assembly Speaker Craig Coughlin, Senate President Steve Sweeney and other lawmakers at his office. They mended disagreements over which taxes to raise and presented a budget that boosts spending in the pension, transit and education.


Murphy said Saturday "today the era of budget gimmicks is ending and the era of a stronger and fairer New Jersey for every family is just beginning."
Sweeney and Coughlin said they plan to have lawmakers vote on the agreement Sunday morning.
The deal finances spending increases by raising the income tax on people making $5 million and above from 8.97 percent to 10.75 percent. It also raises the business tax on companies making more than $1 million by an average of 2 percent over four years. The increase expires after four years.
There will be no broad sales tax increase as part of the deal, though that tax will be levied on e-cigarettes and lodgings like Airbnb. But the agreement doesn't include a tax hike on rental properties at the shore or real estate transactions, proposals that were considered earlier this week.
The clash over raising taxes got heated at times, with Murphy and Sweeney comparing one another to Republican Chris Christie, who left office this year.
But the Democrats seemed to put that behind them. Sweeney called it "one hell of a journey."
"We're well beyond that," he added.
Much of the debate has centered on how much to raise taxes. Murphy has made a tax on income over $1 million - a key campaign promise backed by liberal organizations and labor - a sticking point.
Lawmakers worried millionaires would flee the state, and instead sent Murphy a $36.5 billion budget paid for in part by a tiered hike in the tax on business, which they say firms can afford because of the federal tax cuts.
In the end, Murphy said he agreed to levy the higher income tax on people making $5 million because lawmakers agreed to the 10.75 percent, up from their earlier proposal of 9.95 percent.

More at: https://www.cbsnews.com/news/new-jersey-budget-deal-tonight-shutdown-avoided-chris-christie-beach-photos-2018-06-30/