Another Gov. Murphy Budget: Record Spending, Higher Taxes and a Deficit. Great for the Special Interests, Terrible for NJ.

We wanted to add our quick take on Gov. Murphy’s proposed FY2025 budget.  In a sentence: it’s more spending backed by higher taxes, Murphy’s go-to governance formula, which always and everywhere takes care of his government union allies.  Here are the low-lights:

• Over his 7 budgets, Murphy has increased state government spending from $34.7 billion in Gov. Christie’s last budget to $55.9 billion, a jaw-dropping 61% increase.  It’s also a 3% increase over last year’s record budget despite lagging revenues.
• It is a structurally unbalanced budget and must dip into the state’s Rainy Day fund for $2 billion to fund the gap between revenues and spending.  The Rainy Day fund, which is supposed to be for budget emergencies, will drop from $8.2 billion to $6.1 billion, or 26%.  As the Sweeney Center projected, this is only the first of many deficits to come.
• Despite his pledges otherwise, Murphy wants to raise NJ’s corporate tax rate to 11.5% again, which would be the highest in the nation.  Recall that NJ has had the WORST tax climate for businesses for every year under Murphy, and this will only make it worse.  The tax will be imposed on NJ’s 600 businesses that make over $10 million in profits, which are of course NJ’s most successful businesses and the ones with the wherewithal to move to lower-tax states, which includes neighboring states PA, DE, CT.
• Despite the COVID-related windfalls, Murphy has steadfastly refused to do the hard work of reforming the state’s severely underfunded pension system.  As his biggest political supporter, the NJEA, desires, he is pumping another $7 billion of good money after bad.  The pension system will continue to burden the state long after Murphy is gone.

Murphy is a status quo governor.  He ascended to the governor’s office with the backing of NJ’s powerful and deep-pocketed government unions, led by the NJEA.  These taxpayer-funded special interests always and everywhere want more government spending and the higher taxes to fund it.  Murphy has accommodated them like no other governor.  NJ was a big-government, big-spending, high-tax and cost-of-living state when Murphy was first elected and it is more so now.  Great for the special interests; terrible for the long-term prosperity of the state.

As always, under Murphy, the special interests win and the people of the state lose.