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New Jersey Gov. Phil Murphy: Economic Impact Has Been 'Staggering Across The Board'


It is a hard time to be a state government. First there is a huge boost in spending required to try to contain and manage the coronavirus. Then there's the huge drop in revenue due to the economic recession triggered by the pandemic. The bipartisan National Governors Association says state and local governments need an additional $500 billion in federal aid. But Congress is deadlocked on coronavirus relief. New Jersey Gov. Phil Murphy is managing the financial crunch in his state. He's a Democrat, and he joins us now.

Gov. Murphy, welcome to the program.

PHIL MURPHY: Nice to be with you, Sacha.

PFEIFFER: You have said before that the economic crisis brought on by this pandemic is rivaled only by the Great Depression and the Civil War. Give us a snapshot of your state. How damaged is your budget. What programs are at risk? Who's hurting?

MURPHY: Oh it is damaged. And almost everybody is hurting. But particularly low-income workers and their families have been crushed. So we've had over a million and a half unemployment claims. We're a state of 9 million people, to give you some sense of the staggering scale. Small businesses have been crushed. In terms of our own fiscal well-being, as you rightfully point out, expenses are up through the roof, and revenues have fallen off the table. And we need more out of Congress. We need more out of the Senate Republicans. And we need something big - $500 billion for the nation sounds - that's been a number that sounds about right. New Jersey's number could be as much as $20 billion for us alone. But the impact has been staggering across the board.

PFEIFFER: But as we said, Congress has not made significant progress on another round of pandemic relief. I'm wondering what, realistically, you think you can expect or hold out hopes for.

MURPHY: Well, I still hold out hope for a significant slug because this is long past the time when folks said, well, gosh, it was the Northeast blue states or the states with legacy structural deficits. It's quite clear that this is an American problem. And it runs to red and blue states alike. And so I remain optimistic that we're going to get something. Frustrated for sure but optimistic. We've had to resort to - you know, I've just put a budget in place a couple of weeks ago, a proposed budget that has a lot of borrowing, which I don't relish. But we have no choice.

PFEIFFER: Four billion, I think. Is that the right number?

MURPHY: Four billion is in the budget. Correct. And, you know, this is - you know, this is the time - my gosh, this is the time when we want to do everything we can to keep the services for the people who need them the most in their hour of need, keep folks employed. It defies logic, which is perversely why I remain optimistic that something gets done here at some point, I hope soon.

PFEIFFER: Republican Majority Leader Mitch McConnell, as you know, has said he doesn't want states spending federal aid on - this is his quote - "solving problems that they created for themselves over the years with their pension programs." As of last year, I believe, New Jersey had the most underfunded government worker pensions in the country. What's your answer to McConnell's concern about that?

MURPHY: My answer is he's wrong, unfortunately and as usual. I got elected, actually, almost three years ago to fix the economy. And part of that was to get our fiscal house in order. And we had made enormous progress. Now, there was still a long way to travel, but I would say to Leader McConnell, we've got our pension issue under control. That's not what this is about. This is about keeping firemen, firefighters, police, first responders, health care workers, educators employed, delivering the services that our folks need them at this incredible hour of need. It's about the pandemic, period. And let's get moving in Washington and get something to the president to sign.

PFEIFFER: Gov. Murphy, in the absence of more federal aid, let's talk about what you're doing. Your proposed budget includes about 1 1/4 billion dollars in cuts. It also includes a tax hike on the wealthy. The New Jersey Chamber of Commerce president says it doesn't do enough to help businesses. And he says the state can't recover unless its businesses recover. What's your response to that? And what's your plan to help businesses?

MURPHY: Yeah, listen. I'll put aside the fact I remain optimistic we'll get something from the federal government. We've already put hundreds of millions of dollars in the street for literally - I'm going to say 10 to 20,000 small businesses. We are a state that where the small business community employs the bulk of the folks in our state. So as you rightfully point out, Sacha, we're asking the wealthiest, the big corporations - not an us vs them class warfare here. We're asking them to step up and help us again in our hour of need. And among the folks who get helped, if they're able to step up and we get those revenues that you talked about will be the small business community, will be the unemployed, the very folks who need this the most.

The other challenge we have, as I'm sure most states are seeing, the pandemic didn't create the inequities that we have in our society, particularly along racial lines, but they certainly have laid the bare. And that's another area that we're focused on addressing and investing in, shrinking sooner than later.

PFEIFFER: I believe your proposed budget for New Jersey would leave school funding the same. But given the extra costs of virtual learning and coronavirus safety measures and school buildings, is level funding enough for the schools to function properly?

MURPHY: You know, so it's a good question. Level funding at an all-time record high, I should say. And by the way, I'm honored to say that Education Weekly selected New Jersey for the second year in a row as the No. 1 public education system in America, barely beating out my old state of Massachusetts for the second year in a row. We've found a significant amount of CRF money, federal coronavirus relief funds, and put up against things like the digital divide and closing it, making our schools - and allowing the PPE to be purchased, making schools stronger and more resilient. So yes, flat to the year before. But that's overwhelmingly programmatic money. We've been able, we think, so far to find the resources we need to respond to the pandemic's specific challenges.

PFEIFFER: A quick question about something you propose called baby bonds. For every baby born in 2021 to families under a certain income through the threshold, the state would deposit a thousand dollars into an account they can use when they turn 18. Why launch that in a year when you're borrowing $4 million to get through the crisis? And if you can answer that in 20 seconds or so.

MURPHY: Yeah. Simple answer is we can't ignore tomorrow. As bad as this is right now, we've got to come out the other side of this. It's why we invest in public education, infrastructure. And I love this baby bond program - disproportionately will impact communities and families of color.

PFEIFFER: That's Gov. Phil Murphy of New Jersey. He's also chairman of the Democratic Governors Association. Thank you for talking with us.

MURPHY: Thank you for having me, Sacha. Transcript provided by NPR, Copyright NPR.

Sacha Pfeiffer is a correspondent for NPR's Investigations team and an occasional guest host for some of NPR's national shows.