Senate President Steve Sweeney and Assembly Speaker Craig Coughlin aren’t biting at the offer Gov. Phil Murphy made to the Legislature on Tuesday.
Instead, legislative leaders are revising their revenue estimates and offering the governor new revenue measures, including a tax on short-term rental housing and a surcharge on property sales valued at above $1 million.
“The governor really didn’t offer anything except what we’ve heard in the past,” Sweeney said. “In fact, I remember reporters listing things, like ‘the governor offered this, this and that,’ only for him to retract that.”
Murphy’s offer sought a more modest millionaires tax coupled with a permanent, smaller increase to the corporate business tax sought than the large but temporary one sought by legislators. The governor’s proposal also looked for a phased increase of the state’s sales tax to 7%.
The announcement was followed by the cancellation of a meeting between Murphy and legislative leaders that was scheduled for later in the day.
A senior administration official said the governor’s office cancelled the meeting to further review it before the governor met with lawmakers.
“No one’s throwing anything at the wall,” the official said, adding that the cancellation was not contentious.
Still, not every member of Sweeney’s caucus is on board with the proposed increases.
For one, State Senator Jeff Van Drew (D-Dennis), who represents the state’s southernmost district and a sizeable portion of the Jersey shore, said he would oppose the measure before Sweeney announced it at a press conference on Wednesday.
Another Jersey shore Democrat, State Sen. Vin Gopal (D-Long Branch), was quick to announce his own opposition to the tax. While Van Drew voted against the budget that remains on the governor’s desk, Gopal had supported it.
Further, the proposed tax on short-term rental housing is largely targeted at shore communities that see a large number of short-term rental homes. The new tax could impact tourism by raising the price of shore rentals for consumers, potentially impacting the reelection chances of legislators in shore districts.
But Sweeney didn’t appear to be worried at that prospect.
“I think every state in this region taxes, all the way down to North Carolina, seasonal rental homes.,” Sweeney said. “The only state that doesn’t is us. We are it. We are the outlier.”
It’s not clear how the new proposal will play out, but time for negotiations is beginning to run out.
With only a only three days remaining before the budget deadline, Sweeney remained hopeful that lawmakers could avoid a government shutdown, but he didn’t hesitate to point a finger if the worst came to pass.
“I don’t think there’s going to be a shutdown, to be perfectly honest with you,” Sweeney said. “If they shut it down, it’s because the governor decided to shut it down because he wants to raise taxes on people, and we don’t want to do that.”