THE NEW JERSEY GUBERNATORIAL TRANSITION THE DEFINITIVE GUIDE

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1 THE NEW JERSEY GUBERNATORIAL TRANSITION THE DEFINITIVE GUIDE NOVEMBER 8, 2017 JANUARY 16, POLITICO Pro 1

2 TABLE OF CONTENTS I. Gubernatorial Transition Timeline II. 5 Policy Areas to Watch III. Inside Team Murphy IV. Gubernatorial Transition Checklist

3 I. GUBERNATORIAL TRANSITION TIMELINE WHAT HAPPENS AFTER NOVEMBER 7? NOVEMBER Lame-duck session begins Governor-elect assembles transition team Governor and his Cabinet initiate handover of power NOVEMBER DECEMBER JANUARY Governor-elect names key staff members and announces Cabinet officials Transition team begins review Final push of legislative activity under outgoing governor Outgoing governor likely delivers final State of the State address Transition team releases recommendations JANUARY legislative session begins JANUARY 16 Inauguration Day LATE JANUARY MARCH Governor appoints key Cabinet officials Governor outlines legislative priorities Governor begins laying budget groundwork FEBRUARY Governor delivers budget address and outlines spending plan JUNE Budget due Expected culmination of determined priorities 2017 POLITICO Pro 1

4 II. 5 POLICY AREAS TO WATCH UNDER THE MURPHY ADMINISTRATION After eight years of Republican Gov. Chris Christie, the incoming Murphy administration brings a fresh and Democratic approach to the state s pressing policy issues. Here s a look at five policy areas we ll be watching as Phil Murphy begins his governorship: 1 Taxes The issue of tax policy was center stage throughout the campaign. Murphy has said publicly he would raise an additional $1.3 billion a year in revenue by making several changes to the state tax code notably through a millionaires tax, closing corporate loopholes and a tax on legal marijuana. MORE ON THE CORE ELEMENTS OF MURPHY S TAX PLAN: Millionaires tax: Under Murphy s proposed true millionaires tax, households making more than $1 million annually would see an increased tax rate. His campaign claimed that this would raise an additional $600 million per year in revenue. Pot tax: Murphy s plan estimates an additional $300 million in revenue from a tax on recreational marijuana, if it becomes legal. Closing corporate loopholes: The proposal calls for closing a tax loophole that allows corporations to shift profit made in New Jersey to lower-tax states, returning an anticipated $290 million back to the state POLITICO Pro 2

5 2 Legalized Marijuana Advocates and cannabis industry lobbyists anticipate a sharp turnaround from Christie s staunch opposition to legal pot. Murphy has signaled he plans to pass marijuana legalization in his first 100 days in office. Still, a host of important questions remain unanswered regarding how he d approach the timing and regulatory structure of the nascent industry including how he plans to generate $300 million in revenue from legalizing and taxing recreational marijuana under his $1.3 billion tax plan. Murphy has said he will look to other states that have legalized pot as a regulatory model. Companies won t move without answers to those questions, but the transition will give advocates a chance to shape the administration s approach to this new policy. 3 Education Murphy will address two education issues with major implications across the state. 1. Higher Education: On the campaign trail, Murphy outlined a proposal for tuitionfree community colleges for all New Jersey residents at a projected annual cost of $200 million for the state. The governor-elect has yet to detail how he will fund this proposal. Like many of his other plans for the state that require funding, he has alluded to paying for this initiative through: Increased revenues from a reinvigorated economy Closing corporate loopholes New taxes on the wealthy and on recreational marijuana Noteworthy: State spending on operating costs for New Jersey s public colleges dipped 21 percent between 2008 and 2016, according to a recent report by the left-leaning think tank, New Jersey Policy Perspective. As state investment has dwindled, the rising costs of higher education have been passed on to students and families, the report says. NJPP is calling on the new governor to reaffirm higher education as a priority and appoint a commission to address college affordability, graduation rates, and investments to support post-secondary education in the state POLITICO Pro 3

6 2. School Funding: Murphy committed to fully funding New Jersey school districts and immediately allocating the full amount called for under the state s funding formula in his first budget. By his estimate, the plan would consist of about $600 million to $700 million in new aid, plus another $200 million to $300 million in reallocated aid from districts that are overfunded by the state to underfunded ones. As with Murphy s other legislative priorities, the school funding fix will be paid for by the millionaires tax or other new taxes included in his $1.3 billion revenue plan. Legislative Priority: For years, the state has been underfunding school districts by approximately $800 million to $1 billion a year. Murphy said it s his objective to eliminate that gap during his first year in office. Although Murphy s proposal would close the funding gap based on the existing funding formula, some believe it still would not address the needs of all schools. Districts that have experienced an increase in student population are limited in how much additional state money they can receive due to an existing enrollment growth cap a related issue Murphy will confront as he moves forward on funding K-12 education. 4 Environment Murphy has promised immediate action to restore New Jersey s place in the Regional Greenhouse Gas Initiative, a multi-state program designed to reduce greenhouse gas emissions. Christie pulled the state out of the program in Additionally, Murphy has pledged to pursue clean energy opportunities, including exploring the development of offshore wind farms and increasing the amount of electricity that utility companies are required to purchase from clean energy sources. (ctd.) 2017 POLITICO Pro 4

7 Campaign Flashback: Former Vice President Al Gore endorsed Murphy ahead of the Democratic gubernatorial primary in June. Phil Murphy is dedicated to making New Jersey a leader in solving the climate crisis, Gore said. I ve known and worked with Phil for over two decades now and am confident in his ability to lead New Jersey toward a sustainable future. During the campaign, Sen. Bob Smith, the chairman of the Environment and Energy Committee, laid out a wide-ranging environmental policy agenda in the hopes of a Murphy win. Smith s program includes improved investment in stormwater utilities and methods that ensure that fees paid through utility bills actually go to clean energy funding. 5 Pension Funding As a candidate, Murphy secured the support of most of the state s public employee unions, many of which have accused Christie of short-changing the state s ailing retirement system. Despite his stated intentions to go further than Christie and to reach a full funding agreement as fast as possible, Governor-elect Murphy said he has to get the economy growing so he can afford to do so. While lacking a clear commitment or detailed plan from Murphy, union leaders will likely hold the new governor accountable for increasing state payments into the system. I think he s made a solid commitment with regard to pension funding, which we will hold him to, said Hetty Rosenstein, the New Jersey director of the Communication Works of America, the largest state worker union. The article above is based on original reporting from POLITICO New Jersey Pro POLITICO Pro 5

III. INSIDE TEAM MURPHY QUICK LOOK: WHO ARE PHIL MURPHY AND SHEILA OLIVER?

executive for 23 years (1983-2006) Chair of task force on New Jersey s pension crisis (2005) Finance chair at the

ambassador to Germany (2009 to 2013) Founder of New Start New Jersey, a policy and advocacy think tank (2014)

GOVERNOR-ELECT Age: 65 Residence: East Orange, NJ Birthplace: Newark, NJ Career Recap: Served at every level of New

8 III. INSIDE TEAM MURPHY QUICK LOOK: WHO ARE PHIL MURPHY AND SHEILA OLIVER? Phil Murphy GOVERNOR-ELECT Age: 60 Residence: Middletown, NJ Birthplace: Needham, MA Career Recap: Goldman Sachs executive for 23 years ( ) Chair of task force on New Jersey s pension crisis (2005) Finance chair at the Democratic National Committee ( ) U.S. ambassador to Germany (2009 to 2013) Founder of New Start New Jersey, a policy and advocacy think tank (2014) Sheila Oliver LT. GOVERNOR-ELECT Age: 65 Residence: East Orange, NJ Birthplace: Newark, NJ Career Recap: Served at every level of New Jersey government, from a member of the East Orange Board of Education ( ) to Assembly Speaker ( ) First and only African American woman to serve as Assembly speaker Co-founder of the Resistance Coalition, a group of liberal lawmakers and advocates against Trump administration policies (2017) 2017 POLITICO Pro 6

9 IV. GUBERNATORIAL TRANSITION CHECKLIST While it is left to outgoing governors to set the tone and cadence of the transition, Christie has already indicated that he intends to have a lot of conversations with the governor-elect. I intend to make myself as available as possible, Christie said during the campaign, to not cement things that I ve done but to tell them what to expect. POST-ELECTION TO INAUGURATION: Assemble transition team and inauguration team Prepare inaugural address Organize conversations with and collect memos from outgoing administration Select key staff and Cabinet members Meet with state legislators Set priorities for first 100 days Additionally, Christie has publicly noted that he has advised his Cabinet members to prepare transition memos for the incoming administration. First Priority: Murphy has said his first priority as governor would be a series of initiatives directed at growing the economy, aimed towards creating more jobs and making this state a fairer state the state that it used to be. As of publication, Murphy has yet to outline the specific initiatives to be included. THE FIRST 100 DAYS: Appoint Cabinet Issue first executive orders Prepare for first budget address Re-staff top levels of agencies 2017 POLITICO Pro 7

10 BONUS! Come January, Murphy will move into the Governor s Office but not where you think. With Christie s extensive $300 million Statehouse renovation underway, the incoming administration will be relegated to temporary office space in a nearby government building potentially for the next four years. NEW-TO-TRENTON CHECKLIST Get a haircut at State Barber Shop State Barber Shop Joe Festa, the owner of State Barber Shop, is known as the Mayor of Warren Street and has been cutting hair for Trenton locals and politicians alike for more than 50 years. Still, as Murphy and his team are about to be new to Trenton, we created a bonus checklist of must-do activities around the Capital City. Enjoy a burger at Checker s Food and Spirits See the Trenton Thunder play at Arm & Hammer Park Visit the New Jersey State Museum admission is free! 2017 POLITICO Pro 8

11 DON T MISS A BEAT AS THE TRANSITION UNFOLDS SUBSCRIBE TO NEW JERSEY PRO STAY A STEP AHEAD WITH politicopro.com

THE ESSENTIAL GUIDE TO THE MURPHY ADMINISTRATION JANUARY 2018

THE ESSENTIAL GUIDE TO THE MURPHY ADMINISTRATION JANUARY 2018 TABLE OF CONTENTS I. Legislative Timeline II. First 100 Days: Five Key Promises to Watch III. The Murphy Administration IV. Campaign Promises