Murphy's Law of Budgeting

After intense negotiations with the leaders of both houses of the Democratic-controlled New Jersey state legislature, New Jersey Governor Phil Murphy signed the state budget for the 2018-19 fiscal year into law, averting at the last minute a shutdown that would have forced state offices and parks to close after June 30.  The deal allows New Jerseyans like myself to breathe a sigh of relief after the state experience a major shutdown a year earlier that disrupted just about everything.

Murphy, who has pushed for many liberal initiatives such as strict gun control and a guarantee of Net neutrality from Internet service providers doing business with the state, wants to spend more to improve education and mass transit going forward, and he'll have the money to do it.  There'll be more than $1 billion in revenue from a four-year surcharge on corporations, a tax on people making an annual income of $5 million or more, and even an Uber tax.

Murphy had to give up a few proposals of his in negotiations with Democratic Senate President Steve Sweeney (below, right, with Murphy), such as a sales tax increase from 6 percent to 7 percent and a tax increase on incomes over $1 million.  Sweeney opposed both.

"These long-term commitments require real, reliable, sustainable, long-term revenues," the governor said. "Because of magnanimous concessions on all sides, I am satisfied that the plan we agreed to today, which includes a version of the millionaire's tax as well as a temporary but declining corporation business tax surcharge, will appropriately begin the multi-year process of fixing New Jersey’s fiscal woes in a fair and responsible manner."

Some pundits are already saying that Murphy was the big loser, because he had to give up more.  No, he won.  He secured a plan to put his initiatives and budget priorities in place and got a budget framework for the next three to four years, but more importantly, he avoided a budget shutdown with the Democrats in control of the both houses of the legislature, the Assembly and the Senate, as well as the governorship.  Had there been a shutdown, it would have sent a message that the party is not capable of running New Jersey and lessened chances for the Democrats to retain control of the Assembly in the 2019 midterms more than any tax increase ever could.  Murphy's own ability to govern New Jersey would have been particularly called into question.  And imagine the outrage that would have resulted if the state beaches had been closed this past Sunday in the middle of possibly the worst East Coast heat wave of the decade.  As Governor Murphy noted himself, in recalling the previous shutdown, "A year ago, government shut down and beaches were closed (for most of us, anyway. . .)."

For the record, Murphy didn't follow his predecessor's precedent and go to the beach at Island Beach State Park.  He stayed in and watched the World Cup.

New Jersey Democrats just proved that they can run a state and move it in a progressive direction without Republican obstruction.  That should give Democrats in states where governorships and state legislatures are up for election in 2018 - i.e., most of them - an election campaign boost.