TRENTON, N.J. (AP) - New Jersey Gov. Phil Murphy said Tuesday he’s keeping all options on the table, including using his veto pen, on the $38.7 billion budget that lawmakers are expected to send to him this week.
Assembly and Senate committees on Monday passed the $38.7 billion spending plan and are expected to take final votes on Thursday. The state constitution requires a balanced budget be in effect by July 1.
Murphy said at a news conference Tuesday that he was considering all options at his disposal, including vetoing the measure. That could lead to a government shutdown.
The sticking point for the first-term Democrat is raising the income tax on people making more than $1 million a year, from a top marginal rate of 8.97% to 10.75%.
Leaders in the Democrat-led Legislature say they won’t do it.
While the governor wouldn’t rule out a veto, he did draw a distinction between his threat to veto unrelated legislation extending the state’s expiring tax credit program and the budget without the so-called millionaire’s tax.
“I’m not saying we won’t (veto the budget,” Murphy said. “That option is on the table. As passionate as I think we all are about the millionaire’s tax this is not equivalent to saying - in my humble opinion - as a system is corrupt.”
He was referring to the release Monday of a report by a task force he commissioned that found the state’s tax incentive program was in part written by special interests in order to benefit their business interests.
Murphy could veto the budget outright, which would likely lead to government shutdown. He could use his line-item veto to cut out parts of the budget he opposes. He could also sign it and essentially admit defeat on the millionaire’s tax, which he campaigned on.
The budget that lawmakers passed in committee Monday is not all the different from the one Murphy submitted earlier this year. Some of the key differences include about $100 million in additional spending on a range of programs, including an additional $14 million for post-partum Medicaid coverage and an additional $2.5 million in utility benefits for low-income residents.
Other changes include $50 million beyond Murphy’s proposed subsidy to New Jersey Transit.
Lawmakers are also calling for boosting the state’s surplus to about $1.4 billion from Murphy’s proposed $1.2 billion.
But they’re doing away with Murphy’s proposed deposit into the state’s so-called rainy-day fund, which is separate from the surplus and has not been funded in about a decade.
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