NorthJersey.com political columnist Charles Stile reports on Governor Phil Murphy’s reluctance to engage the “800 lb. gorilla in the room” - growing costs of public employee pensions and benefits.

“Rising debt, pension, public-worker health care and school costs threaten to gobble up every new dollar coming into the state — those costs alone represented 90 percent of new spending in Murphy's first budget. The state's ability to invest in infrastructure, dispense property tax aid and respond to emergencies will be severely curtailed.” 

In an op-ed on the recent state budget agreement, the Press of Atlantic City took legislators and Governor Murphy to task for a budget that was heavy on spending and tax increases. They closed with a stern warning:

“New Jersey’s high-spending, heavy-taxing big government might be working well for its officials, its union workers and a small number of subsidized corporations, but it is poorly serving the people of the state. At some point they may decide their elected officials are doing the same.”

In a July 9 op-ed former New Jersey State Treasurer Andrew Sidamon-Eristoff took apart the recently enacted budget deal:

“If I were asked to make a list of tax policy changes that would do maximum harm to New Jersey’s competitive position and long-term economic vitality, I would have a hard time improving upon the last-minute budget compromise announced on June 30.”

New Jersey faced a government shutdown late last week when its governor, Democrat Phil Murphy, squabbled with leaders of his own party in the state legislature over whose taxes to raise—those of businesses or those of wealthy individuals. In the end, officials compromised and raised taxes on both. The tax burden will increase by about $440 million in a state where residents and businesses already pay some of the nation’s steepest levies.

Gov. Phil Murphy and state Democratic leaders took turns congratulating themselves this weekend for reaching a compromise on a budget agreement that will keep the state parks and beaches open and allegedly restore responsible fiscal management in New Jersey after eight miserly years of Gov. Chris Christie.

Don’t believe the spin.

Regina Egea, president of Garden State Initiative, said in an email Sunday morning that the budget deal was a bad one.

“Taxpayers and job creators are once again being treated like a no-limit credit card, which they will cut up when they flee to other states,” she said.

Egea, a former top official in Gov. Chris Christie’s administration, said the immediate consequences are apparent.

“The worst business climate in the nation continues a downward spiral,” she said. “With higher business taxes, we have created more incentives for job creators to relocate out of state.

“The exodus of taxpayers, especially those who comprise the majority of the 1 percent who contribute the 40 percent of our total income taxes collected, will continue unabated and intensify.”

In a June 24th editorial in The Wall Street Journal the paper's Editorial Board took New Jersey's leadership to task for pursuing taxation policy that is eerily similar to that which brought the State of Connecticut to the brink in recent years:

"Now that Democrats have the run of Trenton, the only questions are whose taxes are going up and by how much. Whatever budget agreement Messrs. Murphy and Sweeney may eventually arrive at, it seems likely to cement New Jersey as one of the most taxing places to live and work in America."

We will win the race to the bottom and be tied with Iowa for the highest tax on businesses in the nation.

While owning the embarrassing title of business tax leader we would also be missing an extraordinary opportunity. A key component of the recent federal tax reform was to reduce the federal corporate tax to a new rate of 21 percent.

Many companies have taken this opportunity to invest in their businesses and expand their operations. Several states, sensing opportunity, moved to lure those investments by reducing their own corporate and income taxes.

Under our current corporate tax rates, New Jersey is already a challenging environment for any employer to grow new jobs.