TRENTON – Near the end of Phil Murphy’s 13-page budget address Tuesday, the governor got around to talking about the millionaire’s tax.

He said he wanted the tax to apply to all millionaires. As of now, it covers only those earning five million dollars a year or more.

The crowd cheered. That was not unexpected. After all, most of the people in the Assembly chamber – lawmakers and visitors alike – were Democrats.

Close observers could see, however, that Senate President Sweeney and Assembly Speaker Coughlin were not joining in the cheers. Actually, their reticence was hard to miss, giving the fact the Democratic leaders were standing right behind Murphy.

If they didn’t applaud extending the millionaire’s tax in public, how are they going to react to it in private?

And that is the battle that likely will ensue between now and the end of June when the 2019-20 budget needs to be adopted. The governor wanted a straight forward millionaire’s tax – rates would jump from 8.97 percent to 10.75 percent – last year as well. But Sweeney and Coughlin refused to go along. The end of the game compromise was to have the tax kick in at the $5 million level. But that took days and made the Dems, who control all levers of power in Trenton, look a bit dysfunctional.

Murphy also criticized federal tax reform for capping the deduction for state and local taxes at $10,000. He’s on solid ground here. There are even many Republicans who would like to see the cap disappear.
But here’s the political side of the coin – actually both sides.

Murphy pointed out that capping the so-called SALT deduction at $10,000 harms many New Jersey taxpayers.

So why increase the pain by expanding the state tax on high-earners? That was Sweeney’s point last year.
Granted, those earning a million bucks a year can afford it. No matter how Republicans spin things, a jump from 8.97 percent to 10.75 percent is not a major jump. You get the impression, however, that Sweeney and Coughlin are not going to want to go along, therefore making for another interesting end of June.

As we noted, Murphy saved the millionaire’s tax to the end

Most of his address touched on things no genuine Democrat or liberal could quibble with.

The governor highlighted such accomplishments as raising the minimum wage eventually to $15 an hour, expanding the family leave program, increasing aid to schools, and in his words, continuing to “fix” New Jersey Transit. His main focus was, as he put it, to help the “middle class.”  In fact, Murphy began his address by proclaiming that “New Jersey is the middle class state.”  That sounded a little hokey, but politics is often like that.

The governor acknowledged that his campaign goal of making pot legal has not been realized, but he expressed optimism a deal with lawmakers is in the works.

One glaring omission was that the governor – as he also failed to do in his state of the state address – said very little about property taxes. It really is not enough to suggest that expanding school aid can help stabilize property taxes. It can, but we truly need bolder ideas than that. For example, what’s going on with a plan to share services or even merge towns? The governor actually named two “czars” to explore that. How are they doing? It’s hard to tell.

The governor did say that his budget makes a record  $3.8 billion contribution to the state’s pension system and that it offers $1.1 billion in “cuts,”  most of which would be realized by reducing employee health costs, but not the level of service.

If this was meant to pacify Republicans, it’s not going to work. The reductions notwithstanding, the proposed budget still would increase spending over the current level.

Then again, Republicans are not the problem.

The battle last year was between Murphy and legislative leaders of his own party. Round Two seems to be upon us. And if pot is indeed legalized by June, lawmakers and the gov. may need it.