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Will the Third Time be the Charm for Murphy’s Millionaires Tax?

Tuesday, February 25, 2020  
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Sweeney says he’ll support a tax this time if the governor puts an extra $1 billion into the pension system

For the past two years, Gov. Phil Murphy has proposed hiking the tax on income over $1 million, and for the past two years, Senate President Steve Sweeney (D-Gloucester) and Assembly Speaker Craig Coughlin     (D-Middlesex) have blocked it. Murphy’s already signaled that he’s going to call for it a third time in today’s budget address, so this time Sweeney has proposed a way to make a deal.

Sweeney says he’ll support a millionaires tax this time if the governor puts an extra $1 billion into the pension system.

“If the governor wants a millionaires tax, we need to get the pension funded sooner. We’re never going to move forward without funding it. They were supposed to put around $700 million in this year. If you add a billion, I’d do a millionaires tax,” Sweeney said. “It’s up to them to figure it out. Half of it is the millionaires tax.”

Why the shift in position?

“We’re not getting anything here until we get this pension system resolved. We got to get it funded, Michael. This would get it pretty close, I’d say very close to getting it 100% funded. And at that point, then we can move forward and begin to invest in other areas we need to invest in in this state,” Sweeney continued.

Assembly Minority Leader Jon Bramnick (R-Union) called a news conference yesterday, mainly to criticize progressive groups who rallied last week.

Bramnick: ‘A serious mistake’

“This is the first I’ve read about Steve Sweeney’s willing to negotiate with the governor about raising new taxes. I think that’s a serious mistake,” Bramnick said.

Calling themselves “For the Many,” they urged the state to put $3 billion more into housing, the environment and transit.

“You’re going to hear a budget address which will drive more people out of the state of New Jersey. How do I know that? Gov. Murphy is controlled by the radical progressive wing of the Democratic Party,” Bramnick said.

“I think Jon Bramnick is the one that’s staked out an extreme position today because he’s taking a position that tax cuts for the wealthy people and corporations matter more than tax fairness and equity for working people and middle income people,” said Dena Mottola Jaborska from New Jersey Citizen Action.

Sweeney appears to be trying to shape the dialogue going into budget season. On Friday, he announced a plan to steer half a billion dollars to NJ Transit, in part by cancelling a reduction in the corporate business tax.

“Transit’s really the lifeblood of this economy, and it’s failing horribly. So looking at the corporate business tax, that’s actually being reduced as an opportunity for the corporations to participate,” Sweeney said.

Moving forward

Sweeney says nothing can get done in New Jersey until the pension system and its $80 billion liability are addressed.

“He’s going to talk about a millionaires tax. I’m open to doing a millionaires tax. But it’s a billion on top of, I want to be clear, on top of what’s being committed in this year’s budget,” Sweeney said.

Sweeney has been a critic of the current pension system, calling for an overhaul for all new employees and those with under five years of service, so it’s odd to see him in this role of the pension system’s savior. Murphy’s office says he’ll take a serious look at the proposal.