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Budget Battle Raging Between NJ Legislature, Gov. Phil Murphy

NEW YORK (CBSNewYork) - A budget battle is raging in New Jersey.

The state legislature just passed its proposal, but Gov. Phil Murphy has no plans to sign it just yet.

Caught in the middle are New Jersey taxpayers, whose hard-earned money is up for grabs as lawmakers debate the latest state budget.

"More money for small businesses, 100%," one resident said.

"I think education would be probably the first thing," another resident said.

"I think they shouldn't tax anything. They should keep the money in our pocket," another resident said.

The legislature just sent a $38.7 billion budget proposal to Murphy's desk, CBS2's Andrea Grymes reports.

It includes $50 million in additional funding for the struggling NJ Transit, more than Murphy's proposed $25 million.

"The ability to really start to reinvest and rebuild New Jersey's transit, where public transportation is critically important to the attraction of residents to this state as well as businesses," Louis Greenwald, New Jersey state Assembly majority leader, said.

The proposed budget also includes $175 million in property tax relief and a record $3.8 billion for the public pension fund.

"We did it without raising taxes," Craig Coughlin, speaker of the New Jersey state Assembly, said.

The legislature's budget does not include the millionaire's tax, which Murphy has been pushing.

He wants residents who make $1 million or more to pay a higher income tax.

In turn, the governor has promised a one-time $125 property tax credit to two million residents making up to $250,000.

"We need the millionaire's tax, by the way, not to begrudge success. It's the American dream, god bless them, but to ask folks to pay a little bit more to help us level the paying field," Murphy said.

Murphy says his team is going through the legislature's proposal line by line, and while it does invest in a lot of his priorities, he says they need to save a lot more.

"There's so much pork, George Helmy and I are considering opening up a chain of diners," Murphy said.

Murphy adds it's imperative that they put money in the state's "rainy day fund," which right now has nothing in it.

He and the legislature have until July 1 to come to an agreement. Despite their differences, Murphy says he'll meet the deadline to enact a balanced budget.

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