Murphy Transition Update; NJ Loses Veteran House Member; 2018 Policy Landscape

NorthStar Strategies TrueNorth Insights

Murphy Administration Taking Shape

Shortly after the election, Governor-elect Phil Murphy announced that Lieutenant Governor-elect Sheila Oliver would head the Department of Community Affairs. This is a fantastic move that taps into the LG-elect’s local government expertise and experience. The move is also significant as the duties of New Jersey’s LG are still evolving. The 2006 constitutional amendment establishing the position stipulates only that the LG shall serve in a cabinet level position. Inaugural LG Kim Guadagno served as Secretary of State during her eight years in office.

Governor-elect Murphy also announced the first two members of his senior staff, naming Pete Cammarano as his chief of staff and Matt Platkin as chief counsel. Cammarano is a partner with CLB Partners, a government affairs consulting firm he founded. He is formerly chief of staff to Senate President and Governor Dick Codey. He is sure to lead the Front Office with a calm and steady hand. Platkin was Policy Director for the Murphy campaign and is a former corporate litigator who previously worked at the Brookings Institution in Washington. We know them both well and can’t think of two better individuals to help the new administration get airborne. We expect their partnership will serve Murphy well.

Fiordaliso Named to Murphy Transition Committee

We’re pleased to announce that NorthStar CEO Joe Fiordaliso has been named to Governor-elect Murphy’s Transportation & Infrastructure transition committee. The appointment was included in last week’s announcement of over 500 people to serve on Murphy’s 14 transition committees. The committees will each prepare and submit a report of recommendations to the Murphy team before Inauguration Day. A full roster of committees can be viewed here.

LoBiondo Announces Retirement…Van Drew Jumps In

New Jersey and Congress lost big-time when Frank LoBiondo announced recently that he would not seek reelection. The veteran House member has represented a swath of southern Jersey since 1995. He’s a senior member of the House Transportation & Infrastructure Committee, has chaired that committee’s Aviation Subcommittee, and has historically advocated for New Jersey’s interests in Washington.

As anticipated, popular State Senator Jeff Van Drew has thrown his hat into the ring and is an announced candidate to replace LoBiondo. The National Republican Campaign Committee will interview prospective candidates which may include recently ousted Atlantic City Mayor Don Guardian and recently-elected State Senator Chris Brown. The open seat adds to several potentially competitive House races in New Jersey in 2018.

2018 Legislative Priorities Coming into Focus

Based on statements made during the campaign and since the election, it appears that several policy issues will dominate the debate in Trenton in 2018.

Cannabis Legalization

Governor-elect Murphy made legalization for recreational use a priority during the campaign. Proponents are hoping for legislative action in the first few months of 2018. Nearly 60% of the public appears to support the effort, according to a September Quinnipiac University poll.

However work still needs to be done to win over several key stakeholders. Incoming Assembly Speaker Craig Coughlin acknowledged arguments on both sides of the debate and called for a thoughtful discussion. Senator Ron Rice, Chairman of the Legislative Black Caucus, has announced he will hold hearings to examine the consequences in the states where cannabis has been legalized. Republicans are not likely to lend broad support to the effort, forcing Dems to rely on their majorities in the Assembly and Senate.

Currently, eight states and the District of Columbia have legalized recreational marijuana.

Minimum Wage Increase

Murphy, Coughlin and Senate President Steve Sweeney stood together shortly after the election to jointly commit to raising New Jersey’s minimum wage to $15 an hour. However all three appear to have different ideas about how to get there. Expect discussion regarding a phase-in and possible exemptions. Republicans and business groups are likely to lobby against the measure, regardless of any softening-related compromises.

Millionaires’ Tax

Gov-elect Murphy is sticking by his campaign pledge to raise taxes on New Jersey’s wealthiest residents, even as Senate President Sweeney expressed concerns that the tax bill being debated in Congress could complicate those plans. Murphy proposed a millionaires’ tax that would give New Jersey the second-highest top tax rate after California and generate roughly $600 million in annual revenue. Senate President Sweeney has previously called the proposed tax a top priority, but warned last week that passage of the Trump tax bill – which according to the non-partisan Congressional Budget Office would blow up the federal deficit to the tune of $1.4 trillion – could cause the Legislature to reconsider the merits of Murphy’s proposal.

Analysis

Most insiders consider the FY2018 budget to be – in technical terms – an absolute mess. Revenue is going to have to come from somewhere in order to address obligations and discretionary priorities. The Legislative and Executive branches have a monumental challenge ahead, and you have to think the revenue items above will receive serious consideration in next Spring’s budget debate. If a federal tax bill is signed with language that cuts the mortgage interest deduction and caps property tax deductions, Trenton’s task could become even more complicated. Look for minimum wage to get done in some fashion this year.

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