Murphy proposes $58.1B budget with higher taxes, more school and local aid

Governor Phil Murphy proposed a record $58.1 billion state budget with more than $1 billion in new taxes and fees, a continued commitment to property-tax relief, and a raft of socially progressive initiatives that may collide with what he called “the noise of chaos and confusion” of President Donald Trump’s administration.

“While I sincerely hope that the situation in Washington settles down, and that we — in turn — have a normal, healthy budget season over the next few months, that is by no means a guarantee,” Murphy said. “There is a distinct possibility that we will, instead, need to pursue a ‘break-the-glass’ strategy.”

Though Murphy didn’t specify what that would entail, he’s budgeting $1 million to hire more lawyers to fight Trump policies on immigration and women’s health in court. 

Taxes and breaks 

The spending plan outlined Feb. 25 would institute or raise taxes on goods and services including streaming video, online gambling and sports betting, cigarettes, alcohol, cannabis, boats and homes sold for more than $1 million. Greater detail will emerge in coming weeks, as the budget is considered by lawmakers. 

Murphy also proposed a handful of sales  tax exemptions for parents, including cribs, car seats, nursing bottles and strollers. Buyers of electric cars could also get a share of $50 million in subsidies.

“The budget will be in flux for some time because of the ominous uncertainty of federal funding,” Senate Budget Chairman Paul Sarlo, a Democrat from Wood-Ridge, said in a statement.

Assemblywoman Nancy Muñoz, a Republican from Summit, questioned Murphy’s priorities.

“We need to strip down to the studs and rebuild with responsible spending and that’s what we intend to do during the budget season,” Muñoz said at a news conference. “How can people who depend on state services survive when the state is increasingly more unaffordable?”

The budget, for the fiscal year that starts July 1, is 2.4% higher than the current one, and is more than 55% greater than Murphy’s first, for 2019. It includes a $7.2 billion payment to the state’s beleaguered pension system, a $6.3 billion surplus and higher spending on municipal and local school aid. More than 2 million homeowners and renters can expect property-tax relief checks that in the past have ranged from $450 to $1,750. 

Murphy warned, though, that Trump, a Republican, could upend the entire budget plan through policy directives. New Jersey and other states rely on billions of federal dollars to fund Medicare, Medicaid and other entitlement programs that Trump’s administration is targeting for potential mass cuts. The elimination of that or other funding theoretically could drain the surplus, for use in emergencies, that Murphy had built from less than $1 billion when he first took office.

Women and immigrants

Murphy, a Democrat whose second and final term will end in January, hailed what he said will be the state’s biggest-ever expenditures on women’s health. That includes a drive to draw obstetricians and gynecologists – blocked from performing abortions in at least a dozen states –  to relocate to New Jersey. 

In January, Trump blocked federal abortion funding and limited enforcement of the Freedom of Access to Clinic Entrances Act, a federal law that prohibited interference with those seeking and providing reproductive health care.

“Those folks in Washington can try and push their anti-choice agenda on us,” Murphy said. “But as long as I am governor they will fail.” 

As the Trump administration detains undocumented immigrants, Murphy committed to spending $11.2 million on legal services via the state’s Office of New Americans.

“I think it’s safe to say that we are facing more uncertainty – at the federal level – than at any other point in modern history,” Murphy said. “And this uncertainty has a direct impact on all of us, and most importantly, the people of New Jersey.”

He added: “I have every intention of working — in good faith — with the Trump administration to better the lives of the people we serve.”

This article is written by Victoria Gladstone, courtesy of New Jersey State House News Service