Politics & Policy

New Jersey Governor Phil Murphy Abandons the ‘Millionaires Tax’

New Jersey Governor Phil Murphy speaks at Monmouth Park Sports Book in Oceanport, N.J., June 14, 2018. (Mike Segar/Reuters)
His tax-and-spend habit receives a necessary rebuke from a fellow state Democrat.

The now-infamous image of Governor Chris Christie seated on New Jersey’s Island Beach during a 2017 government shutdown — alas, some mental images never go away — has proven to be a foil for the agenda of current progressive governor Phil Murphy.

The photograph was fatal to Christie’s public image in the state: Memes littered the Internet featuring Christie and his beach chair pasted into famous works, including Seurat’s Sunday Afternoon on the Island of La Grande Jatte and Da Vinci’s Last Supper. Democratic assemblyman John McKeon was stunned by the intensity of the public outcry, insisting “that should never happen again.” New Jersey residents were furious to see Christie sunbathing on a beach that had been closed to the public — during one of the busiest holiday weekends of the summer — because of the shutdown. It’s now something of a statewide proverb: After “beachgate,” shutting down the government in New Jersey has become political suicide.

Such are the dynamics facing New Jersey governor Phil Murphy, a former Goldman Sachs executive and Boston native, who desperately wanted to bolster his progressive credibility by adding a “millionaires tax” to New Jersey’s already-expansive list of burdensome taxes and fees. Chief among those are the state’s exorbitant property taxes, which often provide the lone funding for local school districts. New Jersey is hemorrhaging money.

This is a familiar story in many blue states nationwide, which are experiencing similar upheaval and out-migration. Connecticut, for instance, has struggled to tame its mammoth pension liabilities, and has seen a large decline in adjusted income, wreaking havoc on the state’s budget. Republicans have been generally loathe to point this phenomenon out, which is particularly infuriating given the massive political hay Democrats have made off a budget shortfall that happened in Kansas several years ago. (Too many Paul Krugman columns have been haphazard jeremiads against Sam Brownback and the 2012 Kansas legislature.)

John Ekdahl Sr., a former Republican mayor of New Jersey’s Rumson borough, told me that the Murphy administration has adhered to the current progressive catechism: New Jersey is now a sanctuary state, illegal aliens can now obtain driver’s licenses, and Murphy fought (and failed) to legalize marijuana. These actions, combined with the state’s high taxes, have caused a groundswell of distaste and anger with the administration. A grassroots movement is apace, Ekdahl told me, to recall Murphy. While it would seem a prime opportunity for state Republicans to rebuff the governor’s agenda, it’s another Democrat — Senate president Stephen Sweeney, a card-carrying steel-union member — who has led the charge to thwart the “millionaires tax” item in the latest budget.

Sweeney flatly rejected the governor’s millionaires-tax proposal. Murphy “can spend $10 million in TV commercials” from the New Jersey Education Association, Sweeney told reporters. “Because it is crystal clear who is running Trenton right now — it’s not the governor’s office. It’s the headquarters of the NJEA.” Sweeney says that Murphy’s protracted email campaign to rally support for the new taxes amount to little more than the governor “repeating himself with a series of misguided and misinformed tantrums in an attempt to distract attention from his legislative and policy failures.”

Sweeney spearheaded a bipartisan coalition in the Senate to remove the millionaires tax from the latest budget proposal, and he succeeded in putting a bill on Murphy’s desk that did not include the tax.

This left Murphy with a choice: Veto the budget and force a government shutdown, resigning himself to a Christie-like fate, or sign the budget and betray a landmark progressive goal that dominated his gubernatorial campaign.

Much to Ekdahl’s surprise, Governor Murphy signed the bill, keeping the state government open. Ekdahl tells me that the removal of the millionaires tax from the budget is a critical rebuke to an administration that is increasingly unpopular with many New Jersey residents, particularly in the southern, more conservative half of the state.

While Ekdahl doesn’t think that Murphy’s opponents will reach the 40 percent threshold of registered voters necessary to put a recall measure on the ballot, “the most common refrain in this state is that no one knows a Murphy voter,” he says, because “no one admits to voting for him.”

Editor’s Note: This article has been emended since its initial publication to better reflect income and migration trends in Connecticut and New Jersey.

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