New Jersey Gov. Muphy, Lawmakers Reach Budget Agreement To Avoid Shutdown
TRENTON, N.J. (CBSNewYork/AP) — New Jersey Gov. Phil Murphy and lawmakers reached a $37.4 billion budget deal Saturday, avoiding the midnight deadline for a government shutdown.
"Today the era of budget gimmicks is ending and the era of a stronger and fairer New Jersey for every family is just beginning," the governor said.
The agreement finances spending increases by raising the income tax on people making $5 million and above from 8.97 percent to 10.75 percent. It also raises the business tax on companies making more than $1 million by an average of 2 percent over four years. The increase expires after four years.
There will be no broad sales tax increase as part of the deal, though that tax will be levied on e-cigarettes and lodgings like Airbnb. But the agreement doesn't include a tax hike on rental properties at the shore or real estate transactions, proposals that were considered earlier this week.
Senate President Steve Sweeney said the agreement "embodies the values of Democrats and will serve the needs and best interests of the people of New Jersey."
"Putting together a responsible and effective budget was a challenge. That's because the issues we face are challenging. This is what compromise and dialogue look like. None of us got all that we wanted, but the final plan is the product of the work of both the Legislature and the Governor," his statement continued. "It is a fiscally responsible budget that addresses our shared priorities and our common goals."
Assembly Speaker Craig Coughlin said the deal "protects New Jersey's taxpayers, honors the priorities set by the Legislature and averts a government shutdown."
"After much work, we have reached an agreement that meets our common priorities and turns the page on the last eight years," his statement continued.
Assembly Majority Leader Louis Greenwald said the agreement "comprises both the Governor's and the Legislature's priorities and sets New Jersey on a strong economic path for the next four years."
"I am proud of the path legislative leadership has taken during these negotiations fighting for funding and programs that our residents want and deserve," his statement continued.
Much of the negotiations centered on how much to raise taxes.
Murphy had made a tax on income over $1 million — a key campaign promise backed by liberal organizations and labor — a sticking point. Lawmakers worried millionaires would flee the state, and instead sent Murphy a $36.5 billion budget paid for in part by a tiered hike in the tax on business, which they say firms can afford because of the federal tax cuts.
In the end, Murphy said he agreed to levy the higher income tax on people making $5 million because lawmakers agreed to the 10.75 percent, up from their earlier proposal of 9.95 percent.
Saturday's announcement means the state's parks, beaches and Motor Vehicle Commission will remain open as the July 4 holiday approaches.
Last year, Republican Gov. Chris Christie and the Democrat-controlled Legislature failed to agree on a budget and the state government was shut down for three days. It ended after photos of Christie sitting on a closed public beach created a national stir.
Lawmakers will meet Sunday morning to finalize the deal and send it to Murphy for his signature.
(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
