NJ Spotlight: Murphy and Sweeney Continue to Spar Over Cut in Sales Tax

by John Reitmeyer

Nearly two years after New Jersey’s sales-tax was dropped to 6.625%, the tax cut remains a subject of debate between Gov. Phil Murphy and legislative leaders from his own party.

Murphy has long been a critic of the cut, which has cost the state budget more than $500 million a year at a time when bills for things like public-worker pensions have been rising.

The revenue loss has also made it harder for Murphy, a first-term Democrat, to boost funding for mass transit, community college tuition aid and other things that he campaigned on in 2017.

But many lawmakers, including Senate President Steve Sweeney (D-Gloucester), have steadfastly defended the sales-tax deal they cut with former Republican Gov. Chris Christie, which dropped the rate in two stages from 7%. They also resisted Murphy’s attempt to reinstate the old rate in last year’s state budget proposal, citing voter concerns about New Jersey’s generally high tax burden.

The battle was rejoined just last week when Murphy called the tax cut a “gimmick,” in response to the latest education-funding proposal put forward by Sweeney. That drew a sharp response from the Senate president, who accused Murphy of seeking a “$1 billion tax hike” — a figure that incorporates the revenue boost stemming both from repealing the sales tax cut and implementing the true millionaires tax the governor has championed as a way to bolster funding for K-12 schools.

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