New Jersey Democrats’ unfinished business from 2018 — raising the minimum wage and legalizing marijuana for recreational use — tops the list of priorities in the new year, which could also feature a politically explosive debate over taxes and public worker benefit rollbacks.

Gov. Phil Murphy, back from a 13-day holiday trip to Tanzania, is tentatively scheduled to meet privately with legislative leaders next week, raising the possibility of a deal on the minimum wage — and a political victory for Murphy — ahead of the governor’s first State of the State address on Jan. 15.

While Murphy, a Democrat, remains at odds with Senate President Stephen Sweeney, D-Gloucester, and Assembly Speaker Craig Coughlin, D-Middlesex, on some aspects of a bill to legalize marijuana, the three men emerged from a meeting last month claiming they had made significant progress toward a compromise to increase the minimum wage to $15 an hour over a period of years.

The state's minimum wage increased by 25 cents to $8.85 on Jan. 1, a bump Murphy said Thursday "isn't worth celebrating" because it amounts to a mere $2 a day for a full-time worker — "not enough to lift them or their family from poverty, and not enough to spur economic growth."

Murphy said in a statement that he hopes to have a deal on the minimum wage "early in the new year."

"When we do, our working families will have a 2019 worth celebrating," he said.

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Disagreement thus far has centered on the timetable for phasing in the $15 wage and which types of workers, if any, should be exempted or put on a slower timeline. Coughlin introduced a bill last month that would ramp up to a $15 wage for most workers by 2024, with people under 18, farm laborers, seasonal workers and employees at small businesses not reaching that threshold until 2029.

After Murphy complained those delays were "a bone in my throat," Sweeney and Coughlin presented Murphy a compromise bill they thought he might have accepted before departing for Africa, according to a legislative source familiar with the negotiations who declined to discuss the specifics of the proposal.

“I look forward to him coming back and us finishing our negotiations on it,” Sweeney told NJTV News earlier this week, referring to a minimum wage bill. “We all felt we were very close to a final agreement … I thought we would get a deal done before the holiday.”

Less certain is when — or if — New Jersey policymakers will clear the way for a new billion-dollar cannabis industry. A package of bills to legalize small amounts of marijuana for adult recreational use, expand the state’s medical marijuana program and overhaul the state’s rules for expunging past criminal convictions has been stalled for months as Murphy and lawmakers argue over how much to tax the drug and how to regulate the new industry.

And even if the two sides reach a compromise, it’s not clear there is enough support in either the Senate or Assembly for the bills to pass.

Fight brewing over NJ taxes

The longer negotiations on those issues drag into 2019, the more likely it is they get mired in political wrangling over the next state budget.

The deadline to approve a new state spending plan is June 30, but Sweeney and Coughlin have already announced their opposition to any new taxes and called on Murphy to reign in ballooning pension and health benefit costs for public workers, which are consuming an ever-larger portion of the state budget.

Significantly cutting those expenses, however, would likely require Murphy to trim the pension and health benefits of public workers, who are among his core supporters. The governor has repeatedly said he wants to regain the trust of those workers and has showed no interest in reducing their benefits, opting instead to work with unions to find more modest cost-saving measures.

Murphy also said last month “it’s too early to tell” whether he would seek new tax hikes in the next state budget.

Those positions could set Murphy and legislative leaders on a collision course and hamper negotiations over other issues. The state is already expected to lose about $400 million in revenue from two tax initiatives — a tax amnesty program and a tax on repatriated corporate assets — that largely phase out after the current fiscal year. It also faces a scheduled $667 million increase in payments into the pension system, which would bring the total pension contribution to more than 10 percent of a roughly $37 billion state budget.

Policymakers will likely have to raise taxes, cut spending or agree to a combination of the two to pay for those commitments and also afford priorities like increasing funding for NJ Transit, ramping up state aid to public schools and offering tuition-free community college.

Murphy may preview his approach in his State of the State address later this month. He is scheduled to unveil his proposal for the next budget during a speech at the Statehouse in early March.

Email: pugliese@northjersey.com