Gov. Phil Murphy on Friday explained all of the reasons why he won’t agree to the $38.7 billion budget proposal lawmakers sent him.

The governor said that the proposal was “short-sighted.” He said it’s important for the budget to be supported by reliable revenue sources and a solid reserve in case of an economic downturn, and that the Legislature’s budget won’t work as a long-term solution.

"We need to be serious about saving for tomorrow and putting our excess revenues into our empty ‘Rainy Day Fund.’ Right now our ‘Rainy Day Fund’…stands at $0, which about matches our ability to match an economic downturn,” Murphy said.

Speaking at a news conference, Murphy reiterated that he's looking at all his options.

Lawmakers rejected Murphy's calls to raise income taxes on people making over $1 million, dealing a blow to the governor over a key campaign promise.

The budget includes billions for schools, pensions and transit.

Murphy must approve a state budget by midnight on June 30 or the state government will be shut down.

The Associated Press wire services contributed to this report.