What's really behind the fight bringing New Jersey to the brink of another shutdown?

Charles Stile | NorthJersey

Show Caption Hide Caption What does an NJ government shutdown look like? If the NJ government shuts down due to a lack of agreement between the governor and the state legislature, here's what will happen next.

Forget the debate over tax hikes.

Put aside the discussion over the risk of prompting millionaires to pack up and leave for lower-tax states. And ignore the debate over who has accurate revenue forecasts — no one really believes them, anyway.

The real issue in the state budget battle bringing New Jersey to the brink of its second state government shutdown in two years has nothing to do with policy, but is about raw power.

This is a fight over which Trenton Democrat will have the real power to run the table in the Statehouse over the next four years.

"In my opinion, none of this has to do with the numbers. It's all politics,'' said Assemblyman Ralph Caputo, D-Essex, a Murphy supporter. "There are some policy differences, but the political situation overrides. There are hard feelings here, obviously."

The Democrats who dominate the Legislature are now facing the constitutionally set deadline of June 30. And they are being asked to take sides.

Will enough rally behind newcomer Gov. Phil Murphy, the Harvard-educated former Goldman Sachs executive pushing a liberal agenda with the help of a slew of tax increases?

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Or will they close ranks behind state Senate President Steven Sweeney, the burly ironworker, Statehouse veteran and close ally of George Norcross, the insurance executive and Democratic power broker whose influence has expanded beyond his South Jersey base since the state's first shutdown in 2006?

Sweeney has teamed up with Assembly Speaker Craig J. Coughlin, D-Middlesex, and is pushing an alternative budget without Murphy's tax hikes, relying instead on revenue squeezed from audits, a tax amnesty program and a two-year surcharge on corporations.

It's just the kind of temporary, stopgap style of funding that Murphy opposes, but the plan passed both houses last Thursday night. Even though it finances most of Murphy's spending plans for public school and mass transit, Murphy has vowed to veto it.

Both sides have kept the door open for more talks.

Summoning Christie, Corzine in fight

Budget battle in Trenton Governor Murphy and legislative leaders differ over numbers as they fail to approve a new budget. (June 21, 2018)

The high-stakes scramble to be the top dog in Trenton has been simmering for months, but it exploded into full view last week. Rarely have intraparty tensions been played out in public like this and with such vitriol.

Murphy and Sweeney, who were briefly rivals for the Democratic nomination for governor two years ago, took turns linking each other to the unpopular governors of the recent past.

Sweeney painted Murphy as the second coming of Jon S. Corzine, the one-term governor from Goldman Sachs who stumbled around Trenton for four years unable to rally the Democratic Party behind him — a party that he had generously financed with his own money.

"This is a repeat of a former governor that thought he was the CEO instead of the governor and that he could dictate to the Legislature,'' Sweeney said late Thursday night.

For his part, the perpetually smiling Murphy took his own swipe, arguing that Sweeney is peddling a Chris Christie-style budget plan, packed with temporary funding gimmicks and pork to be traded for votes.

"Unfortunately, the Legislature seems intent on keeping the legacy of Chris Christie alive and well in Trenton, with a budget to match," he said at a news conference outside his office in Trenton. "This is not Chris Christie's New Jersey."

A furious Sweeney countered that the amiable Murphy was acting like Christie, calling legislators and threatening to cancel funding for pet projects and patronage appointments if they vote for the Sweeney-Coughlin budget.

"That ain’t Mr. Nice Guy,'' Sweeney said.

Recent history shapes fight

Murphy's jab was was a less-than-subtle reminder to Democrats of the Sweeney-Norcross alliance with Christie that led to a steady flow of government largess and attention to their South Jersey base over the past eight years.

The Sweeney-Christie relationship proved fruitful for both men. The city of Camden flourished under Christie, and in turn, the disciplined South Jersey bloc of Democrats turned out the votes for Chrstie's agenda when he needed it.

South Jersey often worked in tandem with an Essex County bloc under control of Essex County Executive Joseph DiVincenczo, another Democratic power broker.

Together they were dubbed the "Christie-crats,'' and they spurred resentment among North Jersey power brokers and lawmakers.

As a result, northern Democrats rallied behind Murphy in last year's governor's race, hoping that their unified support would give him the power to check — and perhaps weaken — the grip of the south and its allies. The budget battle now looms as a test to see if he can pull it off.

But if Murphy fails to cobble together an agreement — one that includes some of his tax hikes — he will be seen as a weak, ineffective chief executive and forced to accept a more measured, maintain-the-status-quo path set by Sweeney and his allies.

Anger lingers from governor's race

In Sweeney's view, the governor is peddling an expensive, left-leaning agenda that is out of step with the state's more moderate heritage.

Sweeney also harbors resentment from last year's campaign, when Murphy refused to take sides in Sweeney's blistering reelection battle with the New Jersey Education Association, the state teachers' union. The union, the state's most powerful and politically active, was an early and enthusiastic Murphy supporter.

Sweeney easily won despite the NJEA's $5 million onslaught, but the fight fostered suspicions that Murphy was hoping the union would succeed.

Now, Sweeney suspects that Murphy is a front for the NJEA's interests as well as other public employee unions with which he's clashed with for years. And he seems intent on putting the brakes on their power.

A panel of financial experts Sweeney has assembled is already examining a range of cost-cutting measures that may target public workers, including a plan to seek another round of benefit givebacks — a sequel, of sorts, to landmark benefit legislation enacted in 2011. It augurs a long, bitter fight with the NJEA and other unions.

Suspicions are running high between the two camps.

Sweeney, for example, is opposed to Murphy's plan to raise the income tax rate on millionaires to 10.75 percent, but has instead countered with a plan to impose a surcharge on corporations. The rate would climb from 9 percent to 11.5 percent for businesses earning between $1 million and $25 million, and to 13 percent for those earning more than $25 million. The surcharge would expire in two years.

Murphy opposes the corporate surcharge, fearing that it will drive businesses out of state and take their employees with them. But some of his allies also suspect that the two-year window is a strategic political ploy by Sweeney to undermine Murphy.

Once the surcharge expires in 2020, it will create an immediate budget hole for Murphy — just as he gears up for reelection.

Sweeney dismissed the scenario. "They've been selling that since they got here,'' he said. He argued that he imposed the two-year surcharge to give Murphy the resources to rein in mounting debt and benefit costs.

"I said, 'I'm giving you two years to fix this,' '' Sweeney said. "I said, 'I'll be your partner.' "

But for now, these two are far from partners, but bitter foes who are competing for power.