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Economics

New Jersey’s Budget Mess Is Getting Even Worse

  • Revenue falling short, and higher taxes imperil election gains
  • Murphy popular with progressives, but base starting to shift
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N.J. Governor Murphy Turns to a Millionaire Tax as Debt Levels Rise
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Governor Phil Murphy, stung by his own party’s cutthroat politics, led New Jersey to the brink of a shutdown last year when fellow Democrats blocked his tax increases. This time, budget negotiations are fraught with even deeper fiscal and political peril.

Income-tax collections, the state’s biggest revenue source, were down 6 percent this fiscal year through January, and S&P Global Ratings says even an April windfall may not close the gap. At risk is Murphy’s promised $3.2 billion payment, a record, to a pension system that’s among the worst-funded among U.S. states. He also has yet to resolve funding issues for New Jersey Transit.