From Insider NJ:
Skipping over the preliminaries — meetings, discussions, negotiations or compromises with legislative leaders — Gov. Phil Murphy went directly to the nuclear option— shutting down state government on July 1 if the Legislature sends him a fiscal 2024 budget that includes extending the corporate tax surcharge to finance a new broad property tax reduction program targeted at senior citizens.
Within 24 hours of Senate President Nick Scutari’s (D-Union) favorable comments in support of a proposal floated by Assembly Speaker Craig Coughlin (D-Middlesex) to target property tax relief to senior citizens, the Murphy Administration — in a rare public outburst of intra-party disagreement — dared the leaders to move ahead against his wishes and risk bringing state government to a halt.
In a stern “don’t call my bluff” warning, the governor said he would veto any budget provisions to continue the five-year-old surcharge and if the Legislature failed to agree by the July 1 constitutional deadline for a new spending plan, government operations would come to a halt.
Driving home his seriousness, Murphy said he’s already ordered contingency plans drawn up for a government shutdown while continuing to provide essential services.
The 2.5 percent surcharge on businesses with over $1 million a year in taxable income will expire at the end of this year and Murphy has made it clear that he stands firm in his view that when it was enacted in 2018 a specific sunset provision was included and government is obligated to abide by it.
Its’ expiration is estimated to result in a loss of $332 million for the remainder of the current fiscal year and $1 billion by fiscal 2025.
While details of Coughlin’s plan are scarce, Murphy criticized it as unfair by singling out a segment of property owners — senior citizens — regardless of financial circumstances and without means testing.
Moreover, the governor has questioned the wisdom of enacting a major multi-billion dollar program at a time of economic uncertainty. Any downturn or revenue loss in the outyears will likely result in scaling back or eliminating the relief program.