Pump Up NJ Transit, Not Budget Surplus, Lawmaker Says of Murphy
(Bloomberg) -- Governor Phil Murphy’s plan to boost his budget surplus is a misguided overture to credit-rating companies when the nation’s second-biggest commuter railroad needs cash, according to New Jersey’s highest-ranking lawmaker.
Though Senate President Steve Sweeney has largely praised Murphy’s $38.6 billion spending plan for fiscal 2020, he said he won’t support the governor’s second call for a tax on millionaires, and suggested he will have other fights as well. Time is running out to legalize recreational marijuana, risking early dominance of the Manhattan-area market, said Sweeney, who has been negotiating legislation for months with Murphy, a fellow Democrat.
Murphy, 61, introduced a plan on March 5 to sock away in excess of $1 billion annually for 2019 and 2020, the first time New Jersey would have such extra since 2009. He also boosted the NJ Transit state subsidy by $25 million, to $407.5 million, the most since at least 2003. Sweeney, though, in an interview in his Trenton office, said the agency needs at least $75 million more than Murphy pitched, after eight years of budget cuts by Republican Chris Christie.
“They stole our train,” said Sweeney, referring to Murphy’s canceling some rail service last year to finish a long-stalled emergency-braking project. “They stole our Atlantic City line and the Princeton line to run up in North Jersey. It’s like, ‘Yo, guys, I want my train back.”’
The routes will return to service on May 24, according to NJ Transit.
Last year, Murphy’s first budget negotiations led to a near-government shutdown as Democrats who control both houses of the legislature battled him over which taxes to raise. Sweeney, 59, blocked a sales-tax boost and compromised on a levy on income over $5 million.
Murphy has pledged to return the state to fiscal health after Christie got 11 downgrades from the three major rating companies, whose criticisms included revenue shortfalls, high pension burden and thin surpluses. At a March 7 meeting with Fitch Ratings, Moody’s Investors Service and S&P Global Ratings, Murphy explained how New Jersey was overcoming habits that led to the second-lowest credit rating among U.S. state governments.
“They’re not going to do anything until they see improvements in the pension,” Sweeney said of the credit analysts. Murphy, a retired Goldman Sachs Group Inc. senior director, told Bloomberg that he doesn’t expect an upgrade even after the budget is enacted, but was seeking financial stability.
For the fiscal year that starts July 1, Murphy budgeted $39 million net revenue from marijuana if sales were to start Jan. 1. New Jersey would be the first Manhattan-area state to allow the drug. Though legalization has support from Murphy, Sweeney and voters, the governor failed on a campaign promise to legalize early in his first year. Sweeney said he plans to introduce marijuana bills on March 11, after he resolves a “minor disagreement” among lawmakers and counts enough votes to pass.
In the coming months, lawmakers will be focused on the budget negotiations, he said.
“You don’t want to be doing marijuana with the budget, because the horse trading that would go along with that would make it a really difficult budget process,” he said. “We’re in a tight window. We need to get it done now.”
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