Republican lawmakers are threatening to sue Gov. Phil Murphy over so-called pork-barrel spending in New Jersey’s budget, charging that millions earmarked for property-tax relief have been improperly used to fund Democratic legislators’ pet projects.
The GOP leaders sent a letter Friday arguing that $300 million in the existing state budget was doled out based on “naked political favoritism,” in violation of the state constitution that requires money derived from income taxes must be used to lower property taxes.
They warned the Democratic governor against doing this again as he prepares to unveil his latest budget proposal Tuesday in Trenton.
“Recent state budgets have been appropriating income tax revenue to named beneficiaries based on naked political favoritism and outside of the pretense of any formula whatsoever — much less one that is reasonable or fair,” five Republican members of the state Senate — including Minority Leader Anthony Bucco, R-Morris, and Declan O’Scanlon, R-Monmouth — wrote in their letter.
“If the budget you propose next week once again seeks to dole out property tax relief funds based on favoritism and the law of the jungle — and the Legislature doubles down on your lead — we will work to bring litigation with aggrieved schools, municipalities and taxpayers whose property tax relief funds have been abused at their expense,” they added.
Stella Porter, a spokeswoman for the governor’s office, denied Murphy had done anything differently from his predecessors.
“The Governor’s budget structure is consistent with budget proposals put forth by governors from both sides of the aisle for decades,” Porter said in a statement to NJ Advance Media.
Spokespeople for state Senate President Nick Scutari, D-Union and state Assembly Speaker Craig Coughlin, D-Middlesex declined to comment.
Lawmakers from the party in charge often add last-minute spending items to the taxpayer-funded budget to benefit their district — sometimes derided as “pork” spending and known in Trenton as “Christmas tree items” because they provide gifts to lawmakers' districts.
Republicans have sharply criticized Democrats — who control both the governor’s office and the state Legislature — for the added spending and a lack of transparency and have blasted Murphy repeatedly for record spending in general the last seven years.
The current budget includes about $700 million in this additional spending. The previous year, Democrats added $1 billion for special projects.
Democratic leaders have defended such spending by saying it often goes toward projects that benefit local communities and residents.
In their letter, Republican leaders say that since the inception of the state income tax in 1976, New Jersey’s Constitution has required income tax revenues to be placed into the “property tax relief fund and to be used exclusively for the purpose of reducing or offsetting property taxes based on a formula.”
Previous governors, and even Murphy up until last year have abided by the law, distributing income tax revenue based on a formula, such as one based on the value of untaxed utility properties. About one-third of state revenues come from income taxes.
But the budget approved last June contains $100 million in spending outside of any spending formula criteria, including $10 million for the Hudson County jail, $8.5 million for various economic developmental programs in Middlesex County and $5.5 million for educational infrastructural programs in Middlesex County, the letter said.
“Transgressions have reached an absurdity that must be ended,” the Republicans wrote in the letter, also signed by state Sens. Michael Testa R-Cumberland, Doug Steinhardt, R-Warren, and Carmen Amato, R-Ocean.
New Jersey notoriously has the highest property taxes in the nation. With a big election year ahead in which voters will choose a new governor and the entire 80-member Assembly, state spending will no doubt be a key issue.
This is expected to be a rough budget cycle. The state government is facing at least a $3.7 billion structural deficit, sources have told NJ Advance Media, though they said leaders are trying to reduce it before Tuesday’s speech.
A structural deficit means the state is spending more than it takes in from taxes and other revenue. Murphy could opt to pull from the state’s surplus fund to cover the gap because state law requires a balanced budget.
Murphy told reporters last week the state “deliberately” and “aggressively” spent more than it took in to help spur the economy after the COVID-19 pandemic.
“We have the luxury of a big surplus that we are willing to eat through to some extent,” the governor said.
But Murphy added that “you’ve got to at some point bend the needle back in the direction toward balance.”
He has already asked from state agencies to prepare to make cuts under the new budget.
After Murphy presents his budget proposal, he and leaders of the Democratic-controlled state Legislature must negotiate a final plan by July 1, the start of the 2026 fiscal year.
NJ Advance Media staff writer Riley Yates contributed to this report.
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Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio.
Brent Johnson may be reached at bjohnson@njadvancemedia.com. Follow him on X at @johnsb01.