By DAVID NAHAN/Sentinel staff
Gov. Phil Murphy said “a fiscal disaster” is weeks away for New Jersey.
In his daily press conference Monday, May 4, the governor said aiming for a $1.28 billion surplus this year is no longer realistic “because of plummeting revenues” caused by the near-shutdown of the state’s economy and the “skyrocketing cost” of fighting the COVID-19 pandemic.
The big fight right now is pushing for direct federal aid, Murphy said. He took an indirect shot at U.S. Senate Majority Leader Mitch McConnell (R-Kentucky), who in April called federal aid to states a “blue state bailout” even though states such as New Jersey and New York send far more tax dollars to the federal government than they get back, unlike Kentucky, a red “taker” state that is annually bailed out by federal funds. McConnell said states should consider bankruptcy instead.
Murphy said the federal government needs to “step forward to invest in states both red and blue” and “bankruptcy is not an option.”
The governor signed an executive order last year to achieve the surplus by the end of this fiscal year. Absent significant outside assistance, he said, “this is no longer feasible.”
He will continue to push for direct federal assistance and work with the Legislature for short-term borrowing to bridge immediate needs.
His administration has been committed to restoring the state’s fiscal foundation, he said, and spent the “past two-plus years working nonstop to build surpluses and put money away for a rainy day,” but “right now, it’s pouring. We’re on the brink of having to make very tough and frankly, very unpalatable” decisions.
The state will have to use up the planned surplus “as a safeguard should direct federal assistance fail to surface.”
The governor said he was going to “veto numerous bills to appropriate money to a number of causes. I don’t want to veto them, but given the situation, I have no other choice.” He did not get into specifics on what he would veto.
Murphy said governors across the United States are facing cuts to critical services and need that federal assistance.
“This is not about legacy fiscal issues either. We will continue our efforts to right our fiscal house, as we have been doing, nor is this a bailout,” he said. “This is about keeping our police and firefighters, our EMTs and paramedics, our public health workers, our educators, and the hardworking folks processing a mountain of unemployment claims, among so many others, on the job, and working to get us through this.”
“A fiscal disaster is not months away. These decisions will be on our doorstep in literally just a few weeks. Congress needs to act and act now,” he said.
Murphy said he’ll work with anyone on either side of the aisle and at every level to get this done for the people of New Jersey.
“Even if Congress delivers, it won’t be enough,” he added, saying the state will need to borrow to meet immediate cash-flow needs. He was asking the Legislature Monday “to pass this legislation swiftly so frontline responders can breathe a little easier.”
