Gov. Phil Murphy signed into law a $38.7 billion budget that boosts education, public pension and transit spending and also keeps state beaches and parks open as the July 4 holiday approaches.

"This budget makes progress, and at the same time, it also falls short," he said in remarks at a Sunday afternoon press conference.

The spending plan includes most of what Murphy sought from the Democrat-led Legislature when he proposed his budget in March. The $38.7 billion budget boosts education, public pension and transit spending and also keeps state beaches and parks open as the July 4 holiday approaches.

"Let me restate the words of my budget address: Our public workers are not the enemy, they are our neighbors," Murphy said. "They are also taxpayers. They are the heart of our middle class. It is not pandering to stand with them, it is doing our jobs."

Murphy, a Democrat, also used his line-item veto to slash $48.5 million from the Democrat-led Legislature's budget. He coupled that with an executive order to hold as much as $235 million in spending in reserve until projected savings are realized or revenues meet expectations.

Murphy acted on the budget, roughly 3% above the previous year's, on Sunday, hours ahead of a constitutional deadline.

Lawmakers turned down Murphy's request for a higher income tax on people making $1 million or more, but added $50 million more for New Jersey Transit, among other programs.

The budget includes $800 million in public worker benefit savings negotiated with the unions. But it was overshadowed over the last few weeks by the power struggle between the governor and Senate President Steve Sweeney.

"Look at the total budget, we did well, we did well," said Sweeney. "And when the governor says whose side are we on, whose side are you on? I'm on the side of all 9 million people in this state. Not just some. When the governor talks about the middle class being public employees, which by the way they are, what about the hotel workers? What about the store clerks? What about the iron workers and the carpenters? Aren't they middle class too?"

Murphy says he's going to continue to fight for a millionaires tax going forward.

Sweeney says he's worried the governor will ask for more tax increases even if he gets a millionaires tax. Sweeney says he thinks the governor will ask for a sales tax increase next.