Sweeney shoots down Murphy’s millionaire’s tax proposal
TRENTON, N.J. (AP) — A top New Jersey lawmaker and fellow Democrat on Tuesday shot down Gov. Phil Murphy’s proposal to use higher-than-expected tax revenue for property tax relief in exchange for a millionaire’s tax.
Senate President Sweeney said in a phone interview that the Democratic governor’s plan is a gimmick and that he doesn’t plan to go along with it.
“Raising taxes to cut taxes is a gimmick,” Sweeney said. “The people are smarter than these gimmicks.”
Sweeney sets the agenda in the Senate, through which the governor’s $38.6 billion budget proposal must pass on its way to the governor’s desk by a constitutionally mandated July 1 deadline. The lawmaker said the proposal was dead on arrival, as far as he was concerned.
Murphy said for the first time Monday that tax receipts are stronger than expected. The current year’s budget raised rates on people earning over $5 million a year and on businesses that make more than $1 million.
The first term governor said during Monday’s town hall in Ewing that he wants to cut property taxes by $250 million if lawmakers support his calls for higher income tax rates on people earning over $1 million a year.
Murphy didn’t say exactly how much tax revenues were up, but the treasurer will brief lawmakers publicly next week.
A message seeking comment was left with Murphy’s office.
Kevin McArdle, a spokesman for Democratic Assembly Speaker Craig Coughlin, said that the chamber’s budget committee is still reviewing the spending plan and that “making any deal would be premature.”
Murphy is proposing a $38.6 billion budget.
Murphy has long called for raising income tax rates on the wealthy, campaigning on the issue in 2017. His allies regularly point to polls showing public support for the idea, but legislators have been lukewarm to raising taxes.
New Jersey has among the highest property taxes in the country, with the average residential bill at about $8,700. The taxes are levied at the local level. Murphy didn’t specify how he plans to cut property taxes, but the budget has included some programs, for example, that offer direct rebates to residents.
Sweeney compared Murphy’s plan to a budget deal under previous Democratic Gov. Jon Corzine that raised the sales tax by a penny in exchange for property tax relief, which he said never fully materialized.
Sweeney has signed onto deals before, though, that resulted in some taxes being raised while others were lowered. In 2016, he agreed to raising the gas tax in exchange for a sales tax cut, as well as lower retirement income taxes. But he drew a distinction.
The difference, he said, was that cuts on retiree income were “good policy,” and that he didn’t want to cut the sales tax as much as it was in the final deal. The rate went from 7% to 6.625% over two years.