- Associated Press - Friday, March 2, 2018

TRENTON, N.J. (AP) - A budget fight over a millionaires tax. Uncertainty surrounding marijuana legalization. The possibility of common ground between the governor and the state’s congressional delegation.

The chatter at New Jersey’s annual power-player cocktail party Thursday cast light on how successful Democratic Gov. Phil Murphy is likely to be in persuading state legislators to approve his agenda.

Politicians, business leaders, lobbyists and journalists came together for the state Chamber of Commerce’s 81st annual train ride to Washington and dinner party in the nation’s capital. Democratic Assembly Speaker Craig Coughlin walked the train cars chatting, and Democratic Senate Majority Leader Loretta Weinberg held court in the dining car.

“I always say this is the best investment of a legislator’s time because you get to see (all of) New Jersey in a short amount of time,” said Democratic Assemblywoman Annette Quijano.

Key takeaways from the trip:



Murphy told the gathering he’s still committed to a promise he made during last year’s campaign to raise taxes on millionaires. That’s a key change to the budget that could bring $600 million in revenue. It’s also a change that Democrats have backed for years under Republican Chris Christie, who vetoed similar bills that the Democrat-led Legislature sent to his desk.

But state Senate President Steve Sweeney, a Democrat, said he’s putting the millionaires tax on the back burner, calling it a “last resort.” Sweeney said he was concerned that such a tax, coupled with the new federal tax law’s elimination of state and local deductions, could drive wealthy residents to leave New Jersey and therefore hurt state revenues. Murphy suggested recalibrating the tax hike if the state’s economy and revenues pick up.

The dynamic has the potential to turn into a budget battle, with Murphy set to unveil his first spending plan in a couple of weeks. If Sweeney kills the millionaires tax, that could dash Murphy’s hopes to fund education and pensions.

That’s a scenario that Murphy has not addressed in his public remarks, choosing instead to stick to his campaign promises despite the changing landscape.

Some Democrats, though, seemed supportive of Murphy’s idea of revisiting the tax hikes.

“A millionaires tax that sunsets - I think would be reasonable because it’s a less bad alternative than balancing the budget on the backs of the middle class,” said Democratic Assemblyman Raj Mukherji.



Another Murphy pledge - to make New Jersey the 10th state to legalize marijuana - was a hot topic on the trip. Democrats seemed to hesitate on supporting legalization while Republicans said they were opposed - though they said they could support decriminalization. Murphy did not mention this issue on the stage Thursday, and neither did Sen. Cory Booker, another prominent supporter of legalization.

Supporters of legalization say the process is likely to move slowly because legislators are still researching the issue. The state’s most vocal opponent, Christie, is now out of office. He regularly called potential marijuana revenue “blood money,” and said legalization sends the wrong message to young people, especially during the opioid crisis.



After Murphy and the state’s congressional delegation met privately in Washington, they said they agreed on the importance of the Gateway project to build new rail tunnels connecting New Jersey and New York, on preventing any offshore drilling near the state’s coast and on what could be the burdensome effect of the federal tax code’s elimination of the state and local tax deduction.

“When it comes to New Jersey we are collectively together,” Democratic Sen. Bob Menendez said. It’s far from certain, though, that will be enough to achieve results. President Donald Trump, for example, prefers states to partner with private enterprise for funding, diminishing the role of federal cash for such projects. Murphy says he prefers to see greater federal spending.

Lawmakers sounded more optimistic about preventing drilling off New Jersey’s coast. Smith said he’s spoken to Interior Secretary Ryan Zinke and is optimistic.

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