HomePrinceton Packet2018 state budget battle has Princeton councilwoman remembering 2006

2018 state budget battle has Princeton councilwoman remembering 2006

As New Jersey faces the prospect of a state government shutdown, Princeton Councilwoman Heather H. Howard has seen this all before.

In 2006, Howard was the chief of policy for Gov. Jon Corzine, a Democrat who was in his first year in office. He battled fellow Democrats, who controlled the state Legislature, over whether to raise the sales tax. The budget stalemate led to the first state government shutdown in New Jersey history, with Howard remembering how Corzine brought in a cot to sleep on in his State House office.

“It is eerily reminiscent,” she said on June 20 of a dispute that, like then, dealt with making structural reforms on one hand or relying on one-shot revenues “to fill budget holes” on the other. She said Corzine wanted to raise the sales tax by a half-cent so there would be “recurring revenue to match the spending obligations.”

Like Corzine, Gov. Phil Murphy is a Democrat, a former Goldman Sachs executive and an outsider to Trenton whose first year in office has featured a tug of war with the Democratic-controlled state Legislature.

Murphy said on June 18 that he would veto the budget lawmakers are proposing, one he said would leave the state with a $164 million deficit and is reliant upon on temporary revenues. Instead, he has favored increasing taxes on people who make more than $1 million and raising the sales tax, now at 6.625 percent, to 7 percent.

During his budget address in March, Murphy offered a proposed budget of $37.4 billion, but lawmakers this week advanced their “fiscally responsible” budget of $36.5 billion, in the words of state Sen. Paul Sarlo, (D-Bergen and Passaic), the chairman of the Senate Budget and Appropriations Committee.

In their plan, lawmakers have proposed a two-year hike of the corporate business tax, taxing the sale of liquid nicotine, and putting a 30-cent surcharge on ride-sharing services, among other things. Their plan does not call for a millionaire’s tax or a sales tax.

Howard sees similarities between now and 2006.

“It is eerie that 12 years later, we’re having the same intra-party issues about how to fix structural problems and the deficit, how to fund priority programs,” she said.

A deadline to act is fast approaching. The state operates on a fiscal year calendar that ends June 30, which is the deadline to pass a budget and avert a government shutdown. In Corzine’s case, the closure lasted from July 1 to July 8. For New Jersey, it was uncharted waters.

In recalling that time, Howard said Corzine officials “were heavily involved in what happens to government operations when there is a shutdown.” They had to figure what services were essential and what weren’t, she said.

“There was a lot of operational work on the executive branch side that isn’t very visible, necessarily, to the public,” she said.

For local governments, a state government shutdown would delay when they could receive state funds.

“I think the biggest issue, of course, would be that if we don’t have a signed, balanced budget in place, that means the funding isn’t authorized or certified, which means local governments that rely upon funding from the state have to wait for any of that funding,” said Mike Cerra, assistant executive director of the New Jersey League of Municipalities, on June 19.

“So whether it be property tax relief funding or dedicated funding for other programs, that obviously is on hold and technically uncertain until the signed budget is put into place,” Cerra said.

One Princeton official echoed a similar concern.

“Depending on how long the shutdown goes on, it can impact funding we might be expecting from the state,” Mayor Liz Lempert said on June 19.

Two state lawmakers who represent Princeton weighed in on the budget impasse. State Sen. Kip Bateman, (R-Mercer, Hunterdon, Middlesex and Somerset) said on June 18 that he thought it “could be an interesting end of June.”

“The last thing you want to do is close the state down,” he said after attending a bill signing with Murphy at a public school in Princeton. “I’m hopeful. I’m always a glass half-full kind of individual. I just think that right now people are digging their heels in with the governor and the Senate President (Stephen M. Sweeney).”

Assemblyman Andrew Zwicker (D-Mercer, Hunterdon, Middlesex and Somerset), said he was optimistic.

“I am confident we are going to get a budget passed and we’re not going to have a shutdown,” Zwicker said. “There’s discussions not so much on funding priorities, but on the revenue side.”

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