Gov. Phil Murphy and top legislative leaders met privately Thursday morning to discuss a potential budget compromise and plan to meet again this afternoon, the first glimmer of hope in nearly a week as the state heads toward a possible shutdown.
Murphy met with state Senate President Steve Sweeney and Assembly Speaker Craig Coughlin for an hour or two inside the governor’s office on West State Street, according to several lawmakers and officials familiar with the discussions. They broke just before noon and expect to resume their talks around 3 p.m. Sources said no deal was cut.
State lawmakers are revising how much the state would earn from the taxation of recreational marijuana in the fiscal 2019 budget – nothing.
They’ve penciled in $60 million in state revenue from taxes on medical marijuana, according to Sen. Nicholas Scutari, D-22nd District.
Scutari, who advocated for the recent expansion of the medical marijuana program, said the $0 revenue projected from recreational cannabis simply acknowledges that such uses is currently illegal – regardless of anyone’s future aims.
"Who is that guy," one passerby asked.
In the minutes before his television appearance went live on News 12 New Jersey, Gov. Phil Murphy posed for photos with onlookers at the Asbury Park boardwalk. But not everyone knew who the tall, smiling semi-celebrity was.
"I think that's the mayor," one person said.
Gov. Phil Murphy's administration put state agencies on notice Friday that they should prepare for a government shutdown if a budget isn't signed by the June 30 deadline.
The letter to Murphy's cabinet members, obtained by NJ Advance Media, outlined a shutdown contingency plan. It was sent shortly after top staffers in the Senate and Assembly met with Murphy's senior staff.
The meeting was hostile, according to three sources with knowledge of the event who would only speak on the condition of anonymity. It ended with an exchange of expletives.
It's hard to imagine a way to come up with $4 billion more in revenue next year. Or the year after that. Or the year after that.
Legalized marijuana? Moody's Investors Services issued a report last week that termed it a "marginal credit positive."
"The positive benefit is limited because marijuana revenues generally represent only a small percentage of annual general-fund revenues" in states that have enacted it.
A new report finds that legalizing and taxing marijuana boosts revenue for state and local governments — but not by much.
The credit rating agency Moody’s Investor Service says in a study released Tuesday that legalizing recreational use of marijuana brings governments more money than it costs to regulate it.
Despite high taxes on the legal sales of the drug, the revenue accounts for a small portion of government budgets. In Colorado, the first state to legalize recreational use, a marijuana tax brings in the equivalent of about 2 percent of the state budget.
He also worries about the imbalance legalization could create in his hometown, as suburban residents presumably would see an opportunity to flock to the city in bigger numbers to legally obtain the substance.
“The Governor is making a mistake,” Rice said. “Now I supported him [Phil Murphy], but he is mistaken here. I don’t support the budget right because there is now no real formula for that marijuana piece. It should be a separate bill. I intend to discuss it with him and really drill down on the research that’s lacking, I believe in his presentation.”
But the effort appears to be moving slowly in the Legislature, and Republicans say they view that as a sign legalization doesn't have enough support to pass the Democrat-led Legislature.
"A number of legislators remain opposed, which would turn that $60 million into a zero," said Republican Assemblyman Brian Rumpf, who opposes legalization and sits on the oversight committee that is considering the issue.
Republican state Sen. Declan O'Scanlon says he's undecided on the issue but thinks the discussion of fiscal year 2019 budget revenues is probably moot.
“We examined other states that already have a legalized mechanism in place and took a conservative estimate based on the revenue they generated in Year One of legalization, keeping in mind that there are differences in the various tax mechanisms and the size and nature of these markets,” said Treasury spokeswoman Jennifer Sciortino.
Murphy’s budget proposal, which the Democratic former Goldman Sachs executive unveiled last week, calls for legalized cannabis by January, but lawmakers are taking a cautious approach.
Marijuana sales are expected to net the state $300 million annually in tax revenue. Why wait? Remember, while you pause before agreeing, those speed bumps in your mind are merely fiction. On the whole, DUI rates and fatal car crashes in states where marijuana is legal are declining, according to a report by the Drug Policy Alliance. After marijuana was legal to sell in their states, a Colorado Department of Public Safety report showed a 6 percent decrease in the violent crime rate statewide from 2009 to 2014, and Washington decreased by 10 percent from 2011 to 2014.