New brawl erupts as top Dem demands Murphy treasurer testify on gov’s spending freeze

Updated Aug 12, 2019

State Senate President Stephen Sweeney plans to call Gov. Phil Murphy’s state treasurer to testify under oath about a state government spending freeze of $235 million that Sweeney has condemned as political retribution after a dramatic budget dispute between the top Democrats, NJ Advance Media has learned.

Murphy issued an executive order in July to freeze the spending, including aid for New Jersey’s distressed cities, cancer treatment and four-year colleges, rather than risking his plan to sock away nearly $1.3 billion in surplus.

The governor froze programs in all corners of the state, with big ones hitting South Jersey, the home base of Sweeney, his political rival.

The largest bite, $105 million, is taken from transitional aid doled out to struggling cities. The governor also impounded $20 million for Essex County jail substance use disorder programs and $15.4 million for a South Jersey cancer program.

Colleges and universities were hit, with $12 million on hold for Cooper Medical School of Rowan University, $7.5 million on hold for Montclair State University, and $4.6 million for Stockton University.

While state Treasurer Elizabeth Muoio said in July the list was rooted in fairness, Sweeney accused Murphy of engaging in an act of political retribution more grievous than former Gov. Chris Christie’s notorious lane closings at the George Washington Bridge. Sweeney called the frozen spending “Bridgegate on steroids.”

A series of letters exchanged over a month between Sweeney and Muoio expose this tit-for-tat, simmering feud.

Sweeney said in an interview Friday that he is not satisfied with Muoio’s replies, which he called “dismissive” and “insulting,” and intends to call her before the state Senate’s budget committee.

“They’re refusing to answer the questions we’ve asked them,” the Senate president said. “I want the answers. … It shouldn’t be that much to ask how did you do it? Why did you do it?”

A spokeswoman for the state Treasury Department, Jennifer Sciortino, said in a statement: "The treasurer responded at length to the Senate president’s letters and also included questions of her own that have gone unanswered. Our priority right now is to closely and continuously monitor our financial position with the goal of releasing funds as soon as it is fiscally prudent to do so.”

In the letters, Sweeney’s office requests the treasurer provide in detail explanations for how and why these spending items were frozen, how the funds will be unfrozen, and who in the governor’s office had a hand in assembling the list.

“Why are accounts not frozen that have routinely budgeted …?” one letter asks. “The need to fund programs for cancer patients, for medical students and re-entry services must exceed many other of the expenditures you chose to sustain.”

This first, July 3 letter challenges Murphy over freezing for programs for “some of the neediest and most vulnerable people in New Jersey, including the hungry, senior citizens and those struggling to overcome substance abuse problems” while leaving in tact funding for electric vehicles, marketing in the Department of Agriculture and dollars for the Office of Innovation and Division of Travel and Tourism.

Sweeney also accuses Murphy of violating the state Constitution by “unilaterally redetermining what items of appropriation are and are not to be included in the FY2020 appropriations act after the spending plan has been signed into law.”

Sweeney’s letters say Murphy abused his executive power to freeze funding in order to preserve his desired level of surplus and not because of any pressing fiscal emergency.

“There is at present no legitimate anticipated budget deficit that justifies the use of emergency powers to place into reserve properly appropriated funds,” a July 29 letter to Muoio says.

Without answering many of Sweeney’s central questions, Muoio writes on July 23 that Murphy’s executive order speaks for itself.

The treasurer argues in her responses that the administration took the step of freezing $235 million in spending because the Legislature loaded the budget with uncertain savings and underfunded spending add-ons.

“It is never an easy task to place appropriations into reserve for programs that we all support,” Muoio writes on July 10, adding “we will closely and continuously monitor our financial position so that we can release funds as soon as it is fiscally prudent to do so.”

She also punches back at the Legislature for failing to publicly disclose the spending items lawmakers added to the budget, saying the administration could use the information in those budget resolutions to knock some spending off the impound list.

When he announced the freezes in July, shortly after signing the $38.7 billion into law, Murphy said it was his job to act responsibly with taxpayer money.

“I want to build a basketball hoop in every driveway in the state, but at the end of the day the buck stops with me,” the governor said. “I’ve got to certify these revenues. I’ve got to make sure that we are within our means.”

While Sweeney was incensed, Murphy insisted there was nothing political about the cuts.

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