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New York - Fiscal Mess, Tax Hikes Likely For New Jersey Governor's First Budget

Published on: March 12, 2018 10:03 PM
By: Reuters
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New Jersey Governor Phil Murphy takes part in a signing ceremony for his first executive order the day he took his oath of office in Trenton, New Jersey, U.S.,January 16, 2018. REUTERS/Lucas JacksonNew Jersey Governor Phil Murphy takes part in a signing ceremony for his first executive order the day he took his oath of office in Trenton, New Jersey, U.S.,January 16, 2018. REUTERS/Lucas Jackson

New York - New Jersey Governor Phil Murphy is expected to unveil tax hikes for businesses or millionaires and the green light for marijuana sales when he proposes his first state budget on Tuesday.

But the state is still mired in fiscal problems left over from Republican Chris Christie’s eight contentious years as governor, and the new Democrat governor’s planned tax rises may not be enough to pay for the bold initiatives he will need to distinguish his new governorship.

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“The great cocktail party discussion in Trenton these days is - what’s the budget going to look like. And the response is, ugly,” said Ben Dworkin, founding director of the Institute for Public Policy & Citizenship at Rowan University in Glassboro.

Murphy’s campaign pledges included raising the minimum wage to $15 an hour, increasing school aid, making community college free and divesting state investments in hedge funds.

“This is a watershed moment in the state’s history,” said Brigid Harrison, political science professor at Montclair State University in Montclair. “The governor went into this making all kinds of promises ... all of which cost money.”

Although Democrats run both houses of the state legislature, some lawmakers may blanch at higher state taxes, given that federal tax changes are expected to penalize residents of high-income, high-tax states including New Jersey.

Senate President Stephen Sweeney previously pushed a millionaire’s tax several times, but last month he called it “too much” and a “last resort” since the federal tax shift.

New Jersey’s other long-term problems still loom. The state has huge liabilities in its underfunded $76 billion public pension system, which was just 49 percent funded in fiscal 2016, according to the most recent data available.

Murphy’s proposal for fiscal year 2019, which begins July 1, will also have to cope without the one-shot revenue measures in the current budget.

Including the loss of revenues from Christie’s sales tax cut - part of his 2016 deal to offset higher gas taxes - total one-time revenues are about $1.4 billion, Moody’s Investors Service analyst Baye Larsen said.

Additionally, New Jersey, unlike most states, failed to replenish its now-empty rainy day fund after draining it in 2009 during the recession, according to The Pew Charitable Trusts.

Those pressures contributed to 11 credit downgrades from Wall Street rating agencies during Christie’s tenure. The state is rated ‘A-’ with a stable outlook by S&P Global Ratings, the second lowest of all U.S. states after Illinois.

Lower scores mean New Jersey must pay higher interest rates to borrow, costing taxpayers more.

The state’s credit spread over top-rated muni debt is 78 basis points. That figure, which shows the gap between New Jersey bonds and triple-A rated bonds, widened from 28 basis points in January 2010 when Christie took office to 115 basis points in June 2017, according to Municipal Market Data, a Thomson Reuters unit.



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1

 Mar 12, 2018 at 11:13 PM Educated Archy Says:

So the state is in fiscal peril and the solution is increase spending? Send more on social services and schools? Raise min wage to $15 an hour which will cost the state more? And the answer is raise taxes? Typical dem liberal? This after Christie raised gas taxes and tolls at the port authority? Sad sad sad.

As a side note re minimu wage, the cost of living in most of NJ is not as expsneive as NY. Why copy NY? they don't need $15 in NJ. And when will you start caring about the poor middle class rather than the rich low income earners who get 50k in social programs?

2

 Mar 13, 2018 at 07:47 AM AmYisroel Says:

So the democrats will do what they do best tax and spend then tax and spend some more

3

 Mar 13, 2018 at 10:20 AM yonasonw Says:

Reply to #2  
AmYisroel Says:

So the democrats will do what they do best tax and spend then tax and spend some more

Your comment completely lacks specificity or substance...it's canned right wing ideological flatulence...just as mindless as some left wing nut labeling all Republicans anti-poor racists.

After eight years GOP Governor Christie left office with, among other things, a 15% approval rating; a breached agreement on pension funding; sharply reduced aid to education; reductions in law enforcement in-service training so severe that some critical use of force training, required by law, had to be eliminated; allegations of obstruction of justice over the firing of a County prosecutor who was about to file a corruption indictment against a Christie buddy; Bridge-gate; a well earned reputation as an ugly bully; and the disdain of a great many State officials of both parties.

Governor Murphy would have to work real hard to sink to Christie's level...and I wager Murphy is going to do a good job.

4

 Mar 13, 2018 at 10:50 AM Educated Archy Says:

Reply to #3  
yonasonw Says:

Your comment completely lacks specificity or substance...it's canned right wing ideological flatulence...just as mindless as some left wing nut labeling all Republicans anti-poor racists.

After eight years GOP Governor Christie left office with, among other things, a 15% approval rating; a breached agreement on pension funding; sharply reduced aid to education; reductions in law enforcement in-service training so severe that some critical use of force training, required by law, had to be eliminated; allegations of obstruction of justice over the firing of a County prosecutor who was about to file a corruption indictment against a Christie buddy; Bridge-gate; a well earned reputation as an ugly bully; and the disdain of a great many State officials of both parties.

Governor Murphy would have to work real hard to sink to Christie's level...and I wager Murphy is going to do a good job.

You have still not justified Murphy spending increase when the state is in a fiscal crisis. I get it he needs to spend on certain critical stuff like underfunded pensions. Although they should get some pension concessions from employees too. But he is increasing spending on social programs too.

And he is increasing the min wage which will cost the state more too. There is no need to increase the mon wage to $15 an hour. Firstly, NJ's cost of living is lower than NY. Secondly, an increase in min wage should come with a decrease in social programs (after all they shouldn't need as much social programs if they earn more). And they are wealthy enough. These min wage earners bring home a higher net income than I do.

5

 Mar 13, 2018 at 12:08 PM AmYisroel Says:

Reply to #3  
yonasonw Says:

Your comment completely lacks specificity or substance...it's canned right wing ideological flatulence...just as mindless as some left wing nut labeling all Republicans anti-poor racists.

After eight years GOP Governor Christie left office with, among other things, a 15% approval rating; a breached agreement on pension funding; sharply reduced aid to education; reductions in law enforcement in-service training so severe that some critical use of force training, required by law, had to be eliminated; allegations of obstruction of justice over the firing of a County prosecutor who was about to file a corruption indictment against a Christie buddy; Bridge-gate; a well earned reputation as an ugly bully; and the disdain of a great many State officials of both parties.

Governor Murphy would have to work real hard to sink to Christie's level...and I wager Murphy is going to do a good job.

um the legislature under christie was democratic there was nothing he could do except stop them from taxing and spending now that all 3 branches are controlled by the democrats they're going to just tax and spend because that is what they do best and that's why nj is in this position his approval rating was so low because he didn't spend enough for the democrats and because he gave in too much on tax and spend for the the republicans state pensions are out of control because of democrats spending and giving to the unions too much

6

 Mar 13, 2018 at 03:40 PM yonasonw Says:

Reply to #4  
Educated Archy Says:

You have still not justified Murphy spending increase when the state is in a fiscal crisis. I get it he needs to spend on certain critical stuff like underfunded pensions. Although they should get some pension concessions from employees too. But he is increasing spending on social programs too.

And he is increasing the min wage which will cost the state more too. There is no need to increase the mon wage to $15 an hour. Firstly, NJ's cost of living is lower than NY. Secondly, an increase in min wage should come with a decrease in social programs (after all they shouldn't need as much social programs if they earn more). And they are wealthy enough. These min wage earners bring home a higher net income than I do.

"You have still not justified Murphy spending increase when the state is in a fiscal crisis."

1. Budgeting involves both revenues and expenditures...one cannot intelligently justify or condemn the "Murphy spending increase" without seeing the entire budget.

2. Yours is a pretty funny comment, coming from one who supports the GOP tax cuts, without regard to their forecast impact in the deficit.

3. If you worked in or had any intimate understanding of public policy, you would appreciate that a comment like "...Secondly, an increase in min wage should come with a decrease in social programs (after all they shouldn't need as much social programs if they earn more)..." is farcical...the overlap you assume generally doesn't exist.

For example, if a kollel family receives CHIP assistance for their children's health care...you would reduce their benefits when the minimum wage goes up? One has nothing to do with the other.

7

 Mar 13, 2018 at 03:57 PM yonasonw Says:

Reply to #5  
AmYisroel Says:

um the legislature under christie was democratic there was nothing he could do except stop them from taxing and spending now that all 3 branches are controlled by the democrats they're going to just tax and spend because that is what they do best and that's why nj is in this position his approval rating was so low because he didn't spend enough for the democrats and because he gave in too much on tax and spend for the the republicans state pensions are out of control because of democrats spending and giving to the unions too much

A Conservative rabbi once protested to me that his movement's decision to allow driving to shul on Shabbos was really no different than the Prozbul. Your comment is just as misinformed...like the Conservative rabbi, you have a little bit of knowledge...but not enough to understand the issue at hand.

"Tax and spend," by the way, is a sloppy slogan, generally meant to object to spending on social welfare programs. After all, fans of Trumpty Dumpty gladly tax and spend for a larger military, for more ICE agents, and for his wall.

Trumpty Dumpty types are generally a selfish lot. More than one, on the pages of VIN, expressly said that as long as they get their tax cuts they are happy. And specifically for Yiddishe Trumpty Dumpty types, as long as "others" would pay for their education vouchers or Yeshiva subsidies...or serve in the military...they are as "entitled" and as happy as punch.

But, chas v'shalom, they might feel a social obligation to help people other than their own. No, no, no...that's "Liberal."

8

 Mar 13, 2018 at 05:43 PM Educated Archy Says:

Reply to #6  
yonasonw Says:

"You have still not justified Murphy spending increase when the state is in a fiscal crisis."

1. Budgeting involves both revenues and expenditures...one cannot intelligently justify or condemn the "Murphy spending increase" without seeing the entire budget.

2. Yours is a pretty funny comment, coming from one who supports the GOP tax cuts, without regard to their forecast impact in the deficit.

3. If you worked in or had any intimate understanding of public policy, you would appreciate that a comment like "...Secondly, an increase in min wage should come with a decrease in social programs (after all they shouldn't need as much social programs if they earn more)..." is farcical...the overlap you assume generally doesn't exist.

For example, if a kollel family receives CHIP assistance for their children's health care...you would reduce their benefits when the minimum wage goes up? One has nothing to do with the other.

"one who supports the GOP tax cuts, without regard to their forecast impact in the deficit."

The fed govt is not in dire straits. Thus The tax cuts are affrodable. The NJ govt is in dire straits

"the overlap you assume generally doesn't exist. "

It sure does and aside form the fact that those mcdonalds workers should get more lets jump to your illustrated example,

" if a kollel family receives CHIP assistance for their children's health care...you would reduce their benefits when the minimum wage goes up"

That kollel wife secretary use to earn $16 an hour. The other non Jewish min wage workers i.e. cleaning staff, cashiers whatever it may be are earning say $12 an hour. Now the min wage is $15 an hour. The boss can no longer pay the Jewish secretary essentially the same as the cleaning lady. He now pays her $18/$20 an hour. Its a trickle effect and it works. So now her CHS should be cut as well.

But what will happen is that social program min income eligibleties will just rise. The Libs will never cut programs

9

 Mar 13, 2018 at 05:46 PM Educated Archy Says:

Reply to #6  
yonasonw Says:

"You have still not justified Murphy spending increase when the state is in a fiscal crisis."

1. Budgeting involves both revenues and expenditures...one cannot intelligently justify or condemn the "Murphy spending increase" without seeing the entire budget.

2. Yours is a pretty funny comment, coming from one who supports the GOP tax cuts, without regard to their forecast impact in the deficit.

3. If you worked in or had any intimate understanding of public policy, you would appreciate that a comment like "...Secondly, an increase in min wage should come with a decrease in social programs (after all they shouldn't need as much social programs if they earn more)..." is farcical...the overlap you assume generally doesn't exist.

For example, if a kollel family receives CHIP assistance for their children's health care...you would reduce their benefits when the minimum wage goes up? One has nothing to do with the other.

After all, fans of Trumpty Dumpty gladly tax and spend for a larger military, for more ICE agents, and for his wall.

Larger military? I agree . Thats a mishigas

More ICE- That deppends if it deports more illegals and decreases our overall govt costs in terms of social progarms and jail costs for criminals, its worth the expense.

His wall- well that may be a wash too. I am assuming once that wall is built, we can reduce spending on ICE since they won't come in. Once again a govt savings

10

 Mar 14, 2018 at 07:41 AM AmYisroel Says:

Reply to #7  
yonasonw Says:

A Conservative rabbi once protested to me that his movement's decision to allow driving to shul on Shabbos was really no different than the Prozbul. Your comment is just as misinformed...like the Conservative rabbi, you have a little bit of knowledge...but not enough to understand the issue at hand.

"Tax and spend," by the way, is a sloppy slogan, generally meant to object to spending on social welfare programs. After all, fans of Trumpty Dumpty gladly tax and spend for a larger military, for more ICE agents, and for his wall.

Trumpty Dumpty types are generally a selfish lot. More than one, on the pages of VIN, expressly said that as long as they get their tax cuts they are happy. And specifically for Yiddishe Trumpty Dumpty types, as long as "others" would pay for their education vouchers or Yeshiva subsidies...or serve in the military...they are as "entitled" and as happy as punch.

But, chas v'shalom, they might feel a social obligation to help people other than their own. No, no, no...that's "Liberal."

Moron tax cuts help the economy while taxvand spend detroy it now murphy want to increase the sales tax that's a tax increase on the poor and middle class but you are too stupid to understand that

11

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