It's no secret that New Jersey Gov. Phil Murphy and State Senate President Steve Sweeney have had a strained relationship. Sweeney says it goes back to when the state's largest teachers union — a major Murphy backer — tried to unseat him and Murphy declined to intervene. But now their relationship has hit a new low, after the governor’s full-throated assault on a controversial corporate tax break program that Sweeney helped implement during former Gov. Chris Christie's administration. And that could impact New Jersey's ongoing budget negotiations.
Murphy is renewing his call for a millionaires tax, which was a major point of contention during 2018's budget battle. Last year, Murphy and the legislature agreed to tax the incomes of residents making more than $5 million, but Sweeney says after Congress's 2017 tax bill capped state and local tax deductions, New Jersey residents are taxed enough. Sweeney would rather balance the budget by reforming pensions and benefits for the state's public workers, which has drawn the outrage of Murphy's union backers.
Neither side appears to giving any ground, and WNYC New Jersey reporter Karen Rouse says there's an increasing possibility the state could experience its second government shutdown in three years if a deal isn't reached by June 30. That's because, while Murphy compromised on the millionaires tax last year, he's less likely to do so this time around.
"He's under pressure to take a stand against Sweeney or risk looking like he has no control," Rouse told WNYC's Jami Floyd. "And he has some advantages. The millionaires tax is popular [and 2019] is an election year."
All 80 Assembly seats are up for election this year.