Governor Phil Murphy said New Jersey’s economy will be caught in a global downturn that could force the state to tap the record $10 billion rainy day fund he is proposing.
(Bloomberg) — Governor Phil Murphy said New Jersey’s economy will be caught in a global downturn that could force the state to tap the record $10 billion rainy day fund he is proposing.
“I worry about what is around the corner,” Murphy said Friday on Bloomberg Television’s “Balance of Power With David Westin.” Any drop wouldn’t be as severe as the 2008-2009 financial crisis, he said, “but we will soften. I’m certain of that. As a country, probably as a world, but certainly New Jersey will not be immune.”
Murphy, a two-term Democrat and retired Goldman Sachs Group Inc. senior director, this week introduced a $53 billion spending plan for the next fiscal year that sets aside 19% for emergencies. It includes no new taxes, an end to a corporate business-tax surcharge and a repeat of this year’s $2 billion in cash rebates for homeowners, whose property-tax bills average $9,490, the highest among US states.
Republicans, the legislature’s minority party, have criticized Murphy’s choices, saying he could use the surplus to ease local schools’ reliance on property taxes. Business groups have said the reserves could replenish the state unemployment fund and pay for major infrastructure projects.
Murphy, though, said the state would regret not having cash on hand. For seven straight years under Murphy’s predecessor, Republican Chris Christie, New Jersey’s surplus never topped $1 billion. The recession forced massive state spending cutbacks.
“The rainy day money is there for a reason, so we do not have to cut programs like property-tax relief or all-time record-high funding of schools,” Murphy said.
For New Jersey Transit, the nation’s largest statewide bus and train operator, Murphy promised no fare increases. At the same time, NJ Transit funding will include a shift of hundreds of millions of dollars from clean-energy and capital accounts to cover day-to-day operations, a practice that Murphy continues even after he has called it poor budgeting.
The governor last year scored upgrades from each of the three major credit-rating companies, for New Jersey’s first such improvement in 17 years. On Tuesday, Murphy said he is seeking “the next round” of ratings improvements, underscoring the need for a record surplus and a third straight full pension payment.
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