Murphy’s staggering spending spree in New Jersey: Where’s the money?

💲 Gov. Phil Murphy set record for state spending

💲 Murphy is spending more than the state takes in

💲 Spending has increased a staggering 61% in 7-years

TRENTON - On Tuesday, Gov. Phil Murphy introduced a $55.9 billion budget proposal to the legislature, claiming it was a fair plan and would bring tax relief to New Jersey residents.

Despite declining revenues and warnings about the state economy, Murphy proposes an increase in state spending of 5%. That's about $6 billion more spending than the state will have the revenue to pay for.

Murphy dismissed those projections as a "hangover" from 2022 and the pandemic downturns while thumping his chest about being able to use billions in state surplus to fund his progressive agenda.

The reality is, Murphy keeps spending money the state does not have and raising taxes and fees on the people and businesses he claims his budget is designed to help.

Even some Democrats in the legislature told me they were shocked at the level of spending and worry many of the programs Murphy is touting as tax relief cannot be funded in the future.

That's what happens when you borrow money to pay for things you cannot afford, and that's what Murphy has done for seven years as governor.

It is the Democratic leadership and rank-and-file legislative members, however, that have been complicit in allowing state spending to soar. An ineffective Republican minority has been unable to blunt the increases.

An historical perspective

The last budget signed into law by Gov. Chris Christie for fiscal year 2018 came in at $34.75 billion.

Christie's first budget, for fiscal year 2011, came in at $28.36 billion and was $1.4 billion less than the previous year.

That was the last time spending was actually reduced year-over-year.

During his eight years as Governor, Christie increased state spending just over $7 billion, or about 8% over that span.

Part of the reason Christie, a Republican, was able to keep overall spending low was by shorting payments into the fund that pays pension and health benefits to public workers and not meeting obligations under the state's school funding formula.

Murphy takes spending to new heights

When Phil Murphy proposed his first budget, he boasted about correcting the cruel and unfair policies of the past.

In doing so, he embarked on an historic spending spree that his critics (and many economists) say is unsustainable.

Murphy's fiscal year 2019 budget came in at $37.4 billion. At the time, Murphy proclaimed, "It is a budget that puts New Jersey families ahead of the wealthy and special interests – and that recognizes that we cannot build a brighter future by acting timidly and thinking small."

In terms of spending, Murphy has gone big.

Tuesday's budget proposal approaches $60 billion.

He will argue that he is being more fiscally responsible by fully funding pension and health benefits and fully meeting New Jersey's school funding formula.

However, since taking office, Murphy has increased spending by $21.15 billion, or 61% in seven years.

That is an average increase of nearly 9% per year, and well ahead of the cost of inflation and more than the tax relief he promises.

Raising taxes to provide tax relief

Murphy has proposed billions of dollars in tax relief in his various budgets. That includes $3.5 billion in his latest spending plan.

However, that relief is not distributed equally among Garden State residents and often does not keep up with the increase in New Jersey's tax burden.

Programs such as ANCHOR, Senior Freeze, StayNJ and child tax credits being funded in Murphy's latest budget are popular, but families already struggling under the crush of the nation's highest property taxes and inflationary pressures are offered only a Band-Aid when their family budgets are hemorrhaging money for expenses.

Those programs also come with a cost. Murphy's budget will raise taxes and fees and eliminate some programs to provide the money.

Murphy even admitted that was flawed policy. "It's kind of crazy to raise taxes to deliver tax relief," Murphy said in 2023.

Critics say Murphy's policies are no more than a redistribution of wealth, and not true tax relief.

The bottom line

Regardless of whether you support Murphy's policies or not, it ultimately comes down to the numbers.

Spending at the levels Murphy has proposed are not sustainable without either a dramatic increase in revenues or one-time revenue boosts through things like borrowing.

That has been the one-shot revenue boost of choice of many governors, not just Murphy, but borrowing adds to the state's overall debt.

As the debt rises, so do the service payments on that debt. (Think interest on a credit card.)

Murphy has one final budget to prepare before he leaves office.

If he follows the pattern he has established over the last seven years, that spending plan could top $60 billion with a nearly $10 billion shortfall in needed revenue to fund it.

Those numbers are staggering for a state of just over 9 million people.

If it comes to pass, Trenton will again have its hand out asking residents to pay more.

It is that continual drain that is driving even greater numbers of people to leave New Jersey where taxes and fees are not nearly as suffocating.

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