NJ government shutdown: Phil Murphy preparing to close state 'if logic doesn't prevail'

Dustin Racioppi | NorthJersey

Show Caption Hide Caption Governor Murphy discusses the budget at today's press conference Governor Murphy speaks during a press conference on Thursday, June 28, 2018.

Gov. Phil Murphy seems unwilling to accept the revenue suggestions of fellow Democrats in the Legislature to end a budget dispute and said he is preparing contingency plans that include a government shutdown if the impasse persists.

In two public appearances Thursday, Murphy reiterated his commitment to including two major revenue sources he unveiled in his $37.4 billion budget in March: raising tax rates on millionaires and restoring the sales tax to 7 percent.

Watch the news conference below.

Murphy all but shot down the possibility of considering a tax on rental properties that Senate President Stephen Sweeney proposed Wednesday in a counter-proposal. Sweeney's offer also includes increasing taxes in other areas, such as realty transfers and transient housing, and increasing the corporate business tax to 13 percent for four years as alternatives to the millionaires and sales taxes he so strongly opposes.

Murphy and members of his administration, whom he met with Thursday morning, are reviewing the Democrats' counter-proposal but showed no willingness to accept it. The idea to tax short-term rentals particularly seemed a non-starter for Murphy.

"That's taking out of the middle class," he said. "That's the opposite of why we were brought here."

Later in the day at a news conference in Trenton to discuss his budget, Murphy took a stronger tone against the Democratic proposals.

"Some in the Trenton ecosystem continue to play games and toss Hail Mary passes from the statehouse to see if maybe just one could land in the end zone," he said. "So far they’ve all been short."

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Where the budget stands

Murphy has until midnight June 30 to sign a budget for the 2019 fiscal year into law. If not, he may be forced to order a shutdown of government services that would force the closure of state parks and beaches and shutter state agencies such as motor vehicle offices. Casinos would remain open, but lottery tickets may not be sold and road work around the state would be paused until an agreement is reached.

It's also possible that the state could run normally into July as negotiations continue. Murphy did not specify his contingency plans Thursday, but said his administration is considering all its options should the two sides fail to reach an agreement. Those plans include a government shutdown, though Murphy said he remains optimistic a deal will be made.

"If logic prevails, there are the makings of a very good compromise and resolution that's reasonable," he said. "But I would be abrogating my responsibilities if we did not plan for the whole range of possible outcomes if logic doesn't prevail, including the shutdown of the state."

Murphy and Democratic leaders met for more than two hours Thursday without reaching an agreement, putting the state one day closer to a possible shutdown.

"We had a good meeting and looking forward to get back at it tomorrow," Assembly Speaker Craig Coughlin, D-Middlesex, said after the meeting.

What's ahead

The Senate canceled a planned voting session for Friday. As of Thursday afternoon, the Assembly still planned to meet. Both houses also planned for votes on Saturday and Monday.

But both sides have said repeatedly that they want to strike an agreement to avoid a shutdown.