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Gov. Murphy digs in over millionaires’ tax, making gov’t shutdown more likely

New Jersey Governor Phil Murphy. (Julio Cortez/AP Photo)

New Jersey Governor Phil Murphy. (Julio Cortez/AP Photo)

Flanked by state and federal labor leaders, Gov. Phil Murphy held an event in Trenton on Tuesday to call on lawmakers to include the so-called millionaire’s tax in this year’s budget.

Budget bills passed by state Senate and Assembly committees on Monday did not include the tax hike on earners making more than $1 million.

“To every legislator willing to kick the can down the road instead of picking it up and doing what’s needed right now, I want to be perfectly clear: the pressure to pass a millionaire’s tax will intensify and not lessen if it is not included in this budget,” Murphy said.

Legislative leaders have openly rejected the idea, and rank-and-file members have said they would vote for a budget without the millionaire’s tax.

State Sen. President Steve Sweeney said residents already pay too much in taxes and suggested that the state should look into the rising costs of public worker pensions and benefits.

Connor Shaw, assistant political director of the International Union of Journeymen and Allied Trades, said the added revenue from the tax hike on millionaires would be necessary for the state to keep its promises to public workers.

“[Public workers] know the pay will never be the same in the public sector as in the private sector, but part of the deal is that they get benefits that allow them to live in the communities they serve,” Shaw said. “That part of the bargain is under attack.”

Democrats in the legislature voted to raise taxes on millionaires several times under former Gov. Chris Christie, who vetoed it, but they have refused to do the same under Murphy.

Last year lawmakers agreed only to raise the income tax rate on people making more than $5 million, from 8.97% to 10.75%.

The governor also used Tuesday’s appearance to weigh in on a report on the state’s tax break programs released the previous night.

In it, the Economic Development Authority task force convened by Murphy described the outsized influence of special interests and political insiders in the expansion of the tax break system that has awarded around $11 billion in incentives.

“We are not just dealing with a broken system. This is a rigged system. This was designed by special interests to benefit special interests,” Murphy said.

The Democrat vowed to veto any legislation that extended the state’s corporate tax break programs, which expire at the end of June.

South Jersey power broker George Norcross sued to stop the release of the report, but a state judge ruled against him.

Norcross’s insurance firm Conner Strong & Buckelew and several companies with ties to him have been approved for hundreds of millions of dollars in awards.

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