Last year, New Jersey’s top Democratic state lawmakers battled so fiercely with Democratic Gov. Phil Murphy over his tax hike proposals that it nearly plunged the state into a government shutdown.

Now, those lawmakers say they’re prepared to fight Murphy once again, over his latest plans to raise taxes on the Garden State’s wealthiest earners — even as they express optimism about the governor’s tone this time.

Murphy on Tuesday renewed his call to increase taxes on people who earn more than $1 million a year in New Jersey as he unveiled his second state budget proposal. He stressed it’s part of his ongoing goal to help the state’s middle class.

Unlike last year, Murphy’s new budget plan is free of other major tax hikes and also includes more than a billion dollars in savings. Both moves could make a millionaires tax more palpable to critics.

But minutes after Murphy finished his speech at the Statehouse in Trenton, his fellow Democrats who lead the state Legislature — state Senate President Stephen Sweeney, D-Gloucester, and state Assembly Speaker Craig Coughlin, D-Middlesex — told reporters they they still don’t have an appetite for a millionaires tax.

“I believe that the governor’s proposal today is an encouraging first step and I appreciate and applaud his efforts to achieve sustainable savings,” Coughlin said at a news conference. “However, I remain convinced that we can achieve additional substantial savings though reforms and other government efficiencies and not rely on a broad-based tax.”

Murphy and lawmakers have until June 30, when the current budget ends, to work out a deal. Otherwise, New Jerseyans could once again stare down the barrel of a state government shutdown.

Lawmakers admitted Tuesday that Murphy’s speech seemed almost like an olive branch to them after months of rocky relations in the governor’s rookie year.

In his first budget, Murphy called for both a millionaires tax and a bump in the state’s sales tax to raise funds for public education, transportation, and public worker pensions. But Democratic leaders balked.

Ultimately, Murphy dropped the sales tax plan and agreed to raise taxes only on people who earn more than $5 million a year — which narrowly avoided what would have been the second state government shutdown in two years.

This time, Murphy’s budget doesn’t call for a sales tax increase and also features $1.1 billion in spending cuts. On the surface, that appears like a compromise with Sweeney and Coughlin, who have insisted in recent months that they wouldn’t agree to more tax hikes unless there are significant reductions in spending.

The Democratic-controlled Legislature has to pass a budget before Murphy signs it into law.

“I understand the budget I am proposing today will not be identical to the one I will ultimately sign," Murphy said in his speech. “We will talk, we will negotiate, and we will compromise."

“Negotiations and progress flow from mutual trust," the governor continued. "They go nowhere when there is only mutual suspicion. That’s the old way. That’s the failed way. And, those days are over.”

Sweeney, Coughlin, and other Democrats noted that Murphy’s speech was noticeably conciliatory. That seemed to blunt some of the friction and leave some wiggle room for a compromise.

Sweeney called it “a very good step.” Coughlin said Murphy “deserves credit."

But both men suggested a few times that maybe more spending cuts could be found instead of a millionaires tax.

“There’s no discussion of pension reform in this,” Sweeney said. “You might not have to do tax increases if you can come up with efficiencies.”

Murphy has never wavered on a millionaires tax. The former Goldman Sachs executive — who himself is a millionaire — began calling for one long before he announced his run for governor.

Polls show a majority of New Jerseyans also support raising taxes on the wealthy.

Sweeney and other Democratic lawmakers supported a millionaires tax five times under Murphy’s Republican predecessor, Chris Christie.

But many lawmakers are not as progressive as Murphy. And Sweeney said his opinion changed on the hike after the Republican federal tax overhaul took away a key property tax deduction that was popular in high-tax New Jersey.

Plus, all 80 seats in the Assembly are on the ballot in November, making it even harder for Coughlin to swallow a tax increase this time.

Still, there are a few reasons all involved would want to avoid a shutdown.

For the Assembly, shutting down the government less than five months before voters head to the polls is something to steer clear from.

Also, the recent federal government shutdown under Republican President Donald Trump was proof voter support could dry when the gears of government grind to a halt.

Sweeney, for his part, acknowledged as much.

“We never want to go down that route, honestly," the Senate president said. “There’s no desire to go for a shutdown. There’s no desire for anything more than to get to a budget that we all can live with. The governor’s budget is a better start this year than it was last year.”

Matt Arco may be reached at marco@njadvancemedia.com. Follow him on Twitter @MatthewArco or Facebook.

Brent Johnson may be reached at bjohnson@njadvancemedia.com. Follow him on Twitter @johnsb01.

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