Analysis: In Clash of Democratic Titans, Taxpayers Will Pay

With four weeks to go before state lawmakers and Gov. Phil Murphy have to agree on a new spending plan, the civil war raging among Democrats threatens to derail the process.

June is when the real negotiations begin on a spending plan for the new fiscal year that begins July 1. Senate President Steve Sweeney and Assembly Speaker Craig Coughlin are resolute in their rejection of Murphy’s plan to impose higher taxes on millionaires.  During the eight years of republican Chris Christie, Sweeney regularly championed the millionaires’ tax, but now claims taxes are too high and worries taxing the rich will lead to more out migration. Murphy links the millionaires’ tax to funding public worker pensions, school funding and property tax relief.  He launched a new ad campaign saying its “tax fairness” to tax “people like me” (i.e. the rich).  Sweeney says New Jersey’s taxes are already too high, and there is no need to add to that burden.

Sweeney has released his own plan to right the state's fiscal wrongs, but Murphy has been cool to Sweeney's idea to curb state workers' health and pension benefits. Both Sweeney and Coughlin have also criticized Murphy for his association with a “dark money” group funding ads on his behalf, and refusing to disclose the source of those funds.

The already bad blood between Murphy and Sweeney has only grown worse as the governor probes tax incentives that have greatly benefited South Jersey political boss George Norcross. Murphy’s appointed task force has already raised questions about how tax incentives were awarded to companies connected to Norcross. Norcross is a strong ally and childhood friend of Sweeney. Norcross has denied any wrongdoing, and has countered with a lawsuit against Murphy. If the turf war between Murphy and Sweeney wasn’t personal before, it certainly is now.

With a month to go before the budget deadline, where does this leave us? With neither side showing any sign of backing down, the possibility of a government shutdown is real. Murphy said as much last week when he stepped up public attacks on Sweeney over his resistance to tax hikes. No one really wants a shutdown. It’s bad optics for all involved.  Murphy and Sweeney barely avoided a shutdown last year with what turned out to be a rare moment of cooperation and compromise. With the acrimony between them growing, it may be unavoidable this year, and it’s taxpayers who are caught in the middle.