Feud over NJ millionaires’ tax could lead to state government shutdown

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A feud between Gov. Phil Murphy and state Legislature leaders could possibly lead to the shutdown of the state government by the end of the month.

The governor and the Democratic-led Legislature cannot agree on a proposal to tax New Jersey residents who make more than $1 million per year. If they cannot agree then the state budget cannot be approved, leading to a government shutdown by June 30.

“I don't think anything at this point is changing the Legislature's position that we've seen so far and we haven't seen anything that's changing the governor's position so far. We need a way around that,” says Micah Rasmussen with the Rebovich Institute for New Jersey Politics at Rider University.

Murphy says that a millionaires’ tax would bring in just over a half of a billion dollars of extra revenue per year for the state. But Assembly Speaker Craig Coughlin and Senate President Steve Sweeney are both opposed.

RELATED: Gov. Murphy pushes for tax on millionaires ahead of state budget 
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“I have been pretty crystal clear on the notion that this is not the time to have a millionaires’ tax,” says Coughlin.

“We don't want to tax individuals. We don't. We taxed billion-dollar - not million-dollar – billion-dollar corporations,” says Sweeney.

Sweeney has voted for a millionaires’ tax seven times during the administration of Republican Gov. Chris Christie. But now the Senate president says the Trump administration tax plan made hiking taxes on the wealthy a nonstarter.

“It was a show. It was something they were willing to advance as long as they knew the governor was going to veto it,” Rasmussen says. “And now that they know there's a governor who will sign it, they're not in favor of it. They don't want to raise those taxes.”

Rasmussen says that if the government shuts down at midnight June 30, it’s New Jersey residents who will be impacted.

“The first time you try to go to the beach - Island Beach State Park - and it’s shut down. Or it's the first time you go to a state office to renew your driver’s license and you can't do it,” Rasmussen says.

The last state government shutdown happened only two years ago under the Christie administration.

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