New Jersey on the Brink of a Shutdown

TRENTON, N.J. — Last year, a standoff between a Republican governor and a Democratic-controlled Legislature led to a shutdown of the New Jersey state government. This year, the Democrats have full control in Trenton, yet the government is on the brink of another shutdown, as Gov. Philip D. Murphy and the state Legislature have been unable to broker a budget deal and face a deadline of midnight Saturday.

Murphy and legislative leaders, including Stephen M. Sweeney, the Senate president, and Craig Coughlin, the Assembly speaker, remained far apart on a host of potential tax hikes to pay for an expansive progressive agenda.

Any signs of hope from nearly 5 1/2 hours of negotiations Friday were quickly dashed as the two sides resumed name-calling and finger-pointing.

“His behavior is exactly like Chris Christie’s but he smiles more,” Sweeney said of Murphy, referring to the former governor.

“I have never seen the level of obstructionism come from the legislative leadership as I am seeing in this cycle,” said Lt. Gov. Sheila Oliver.

The central disagreement remained a tax on the wealthy.

On Saturday morning, Murphy sent a letter to Sweeney and Coughlin, offering a compromise on his so-called millionaire’s tax and a corporate business tax and removing his plan to raise the sales tax.

In the letter, Murphy proposed raising the income tax on those making over $1.75 million from 8.97 percent to 10.95 percent, which he said would raise $550 million in new revenue.

Earlier Friday, Sweeney, who had been adamant for months that he would not accept any form of a millionaire’s tax, proposed a tax of 9.95 percent on those making over $5 million.

The governor dismissed that idea, saying that it fell hundreds of millions of dollars short of the revenue his proposed tax would bring in.

“None of us are here for symbolism,” Murphy said, who noted that even he would be exempted from paying more under Sweeney’s proposed millionaire’s tax. “I’m here to restore fiscal common sense to this state.”

In dueling news conferences Friday, both sides sought to put the onus on the other to restart negotiations. But the exasperation was evident.

“I wish I had better news, but I am bitterly disappointed that we are unable to reach an agreement with the governor today,” Coughlin said.

If the negotiators are unable to reach a deal, officials said they would be forced to close state-run parks and beaches as temperatures start to climb, as well as courthouses and offices of the Motor Vehicle Commission. On Friday, at Island Beach State Park, visitors crusted in salt, suntan lotion and sand curled their lips and shook their heads in disgust at the prospect of another government shutdown.

Debbie Castle, 62, who is retired and lives in Whiting, said Island Beach State Park gives everyday families a place to play in the surf — New Jersey residents can enjoy the surf for $10 per carload on weekends, far cheaper than the day rates collected at nearly every other Jersey Shore beach.

“I have a granddaughter, I have friends with children,” she said. “This is an affordable beach and if you close the beach you take away the affordability for the families.”

Brophy Sheen, 41, brought his dog Harley to the park so he could swim and she could chase birds. Though he lives nearby, he rarely has enough time off from his bartending job to go to the beach. A shutdown would hurt his workplace and deny him a trip to the beach.

“If people couldn’t get on the beach I ain’t making” he said, ending his sentence with a euphemism for the poop from Harley that he picked up.

Though Island Beach State Park is the only state park along the ocean, at over 10 miles it is a lengthy stretch of sand.

A potential shutdown would also hamper the nascent sports betting operation in New Jersey, since Monmouth Park, one of the three venues that are taking bets, would be forced to close. The two other racetracks in the state would also have to shut down.

Casinos in Atlantic City would remain open, however, including the sports betting operations at the Borgata and Ocean Resort casinos, even though the state monitors assigned to oversee the gambling would be furloughed. A law passed following the state’s first shutdown, in 2006, allowed casinos to remain open for up to a week under self-regulation.

The current disagreement began in March when Murphy released his first budget. While Sweeney had at first supported a tax on the wealthy following Murphy’s election in November, pledging it would be the first bill he passes with the governor, the Senate president reversed course following the passage of the federal tax law.

But Murphy, who had campaigned extensively on raising taxes on the wealthy, included the millionaire’s tax in his inaugural budget, despite earlier vocal opposition from Sweeney, leading to a monthslong staring contest between the two Democrats.

By Saturday, neither had blinked. While 2017 was marked by budget standoffs in statehouses around the country, New Jersey is an outlier this year as the only state in the country that remains unable to reach some sort of a budget agreement by the fiscal deadline, according to the National Conference of State Legislatures.

The government shutdown in New Jersey comes on the heels of the last shutdown just a year ago, when former Gov. Chris Christie demanded that the budget include a provision requiring that Horizon Blue Cross Blue Shield spend some of its reserve fund on public health initiatives — particularly his drug treatment initiative.

The state remained shut down for three days, but made national headlines for the infamous photographs of Christie lounging on the beach with his family in Island Beach State Park, which had been closed to due to the budget standoff.

But the last time the state shut down under a Democratic governor was 12 years ago, when former Gov. Jon S. Corzine battled the Legislature over raising the sales tax during his first year in office. That shutdown, the first in state history, lasted for eight days.