>> Good evening and welcome to "MetroFocus."

I am Rafael Pi Roman.

-month period as has been the case for many years, New Jersey has the highest property taxes in the nation.

Now concerns over residents leaving New Jersey in search of lower taxes have apparently caused elected officials to pass a new tax relief plan specifically claimed that keeping out elderly residents in the state.

The plan called "StayNJ," Instacart property taxes and have for most of the states seniors.

But it doesn't take effect until 2026, leaving critics to question whether the payout will actually happen.

Joining us to talk about natures is new property tax credit and more, is "MetroFocus" contributor and host of "state of affairs" Steve Adubato.

Welcome Steve: To the program.

Steve: Thank you.

Rafael: Property taxes have been as high in New Jersey as far as I can remember.

But the problem of people leaving New Jersey in search of lower taxes, that is new to me.

You can tell us, how big is that problem?

Steve: It's real.

You know Florida better than most.

Florida does not have an income tax.

It's anecdotal, but I have lost count of the number of friends and contemporaries of mine who have left the state to be in Florida for more than half the number of days in the year, which then means you don't pay any income tax.

That is a big deal.

And so New Jersey is losing a whole range of disproportionately middle and upper income people to other states who have lower taxes, or in the case of Florida, no taxes.

It is real.

Every time I have interviewed Governor Murphy, he argues that the statistics don't back it up.

Anecdotally, I have to tell you, it feels very real to me.

Rafael: How is the new law supposed to work?

Who is eligible for tax break and how much are those who are eligible going to be getting?

Steve: Let's be clear, Governor Murphy, when this was proposed, the "StayNJ" property tax rebate or tax credit, when it was proposed by State assembly Speaker Kaufman, you know this because you covered it, Governor Murphy said no.

I am against this.

And Governor Murphy at the time said not only could New Jersey not afford it, not only was it geared towards upper income New Jerseyans, he said, I will get this benefit as a multimillionaire, which Murphy is -- he says I am willing to potentially shut the government down by not signing this budget on the last day of June which is when the constitution says the budget has to be struck.

Then, all of a sudden, there was a negotiation and it got done.

So here's the deal, if you earn less than $500,000, you are eligible for this tax credit, up to $6,500 in tax credit.

The average property tax bill is $9,500 a year.

So if there is up to a 6500 dollar tax credit, it potentially cuts property taxes in half for a large number, 90% plus of all New Jerseyans.

Then all of a sudden Governor Murphy was for it, he signed it, it passed unanimously in the Senate, virtually everyone voted for it in the assembly.

No one wants to be against a tax cut in an election year, and that is what happened.

Jack: One of the biggest criticisms of StayNJ is that it will disproportionately benefit wealthy homeowners.

The Center on budget and policy priorities, a Washington-based nonpartisan research group called it "an unsustainable tax cut for the 1%.

Is that a fair characterization?

Steve: Originally, it would have been.

I know this sounds crazy, but once you moved it down to $500,000 or less, it changed a lot.

Because it's not 1%, it's a different number than that.

But the reality is this, here's what I am most concerned about -- I am more concerned that New Jersey can't afford it.

I am more concerned that the federal aid tied to the pandemic is dried up.

I am actually concerned that, why are we doing this in the beginning of 2026, if it is such a good idea?

if New Jersey can afford this tax credit, why aren't we doing it now?

We are not doing it now.

We are doing it with the next governor takes over, because Murphy will be gone by then.

I don't know if the state is going to have the money to do it, and I seriously question whether it will ever become a reality.

Rafael: So that is a question, but maybe then we have the answer as to why Murphy changed his mind about the bill.

Steve: Steve: Not on my watch.

Not on my watch.

Rafael: But if it is postponed to the next administration, and I believe the next administration has the prerogative to follow it or not, I mean, what are the chances this thing will ever be implemented really?

Steve: So, raf, you and I are not big on political prognostication?

Who could have pretty today global pandemic?

I think the odds are not in favor of this become reality because I think New Jersey's political picture will change significantly in the next three years.

It will be a lot tighter.

The surplus will not be there.

The federal money will not be there.

I am concerned about income tax and sales tax revenue.

And I believe the $1.3 billion it will cost to fund this state New Jersey tax credit give back, I believe it will be very hard to find that many in January of 2026.

Rafael: Well, this tax credit is part of the $54.3 billion state budget that was passed, which is a 7% increase from last year's budget, and a 45% increase from the first budget Governor Murphy signed into law in 2018.

So the state must be flush with cash for now and the foreseeable future, if, on this election year they are passing this generous budget with this general tax code.

Where are my wrong?

Steve: Are you saying that with a straight face, my partner and friend?

[LAUGHTER] So, here is the way I see it.

I give Governor Murphy a lot of credit, and the legislature, for fully funding the public employee pension fund.

Without getting deep into the weeds of this, you and I who follow government policy well, know that the state pension fund is underfunded.

It's a huge liability.

But, to Murphy's credit, they paid into it.

That is a good thing.

If you don't.

, the interest rate down the road would have been too high.

However, this give back, this StayNJ give back, in my view, it's not smart public policy.

The governor was originally correct when he said this is not smart fiscally.

Even though changes were made and amendments were made and modifications were made, negotiated, it's still a mistake.

This budget, bigger than ever, miscalculate the future.

I am a fiscal conservative when it comes to my own family funds, meaning, you have to think worst-case scenario.

You have to be conservative.

You can count on all of this money coming again.

.

It's not coming from the feds anymore.

I believe it mistake was made in increasing the budget to this degree, at this time.

It was not smart fiscally.

Politically, may.

But not fiscally.

Rafael: All that being said, to be fair, there are some things, as you said -- I remember when we were doing the program, having the public pensions funded.

Steve: It was a big deal.

Rafael: That seems to have been taken seriously.

Steve: More money for child care, for pre-k, allegedly more money, sorry for interrupting, for school districts and states.

A lot of good things have been done here, to be fair and clear.

Rafael: Out of this $54.3 billion budget which was very big, we both agree, how much would you say is politically calculated rather than necessary ?

Steve: As a former state legislator, which you like to remind people I was the, in the mid-1980's, 20 five years old in the legislature, 27, voted out of office.

I was on the finance committee, the budget and finance committee.

One persons fat in the budget is another persons -- hey, that's a really good project for my constituents.

So I will not take on the question of fat and pork because if it's helping someone in their district, their constituents want it.

So what is pork and what is really good policy?

Rafael: So, going back to being unfair -- [LAUGHTER] -- Steve: We are not being unfair.

Rafael: Just kidding.

Going back to questioning what has been happening.

We have this budget at a time when as you correctly say, the fiscal future of New Jersey is clarity best.

Probably negative, if not cloudy.

And we have this tax credit that, it's expensive, may be too much geared to the wealthiest New Jerseyans, maybe not.

And probably will not happen.

And I think the implication is that it is happening because it's an election year.

Steve: Right.

Rafael: You are an expert in the subject of leadership.

Let me ask you, is this good leadership?

Steve: I think it's pragmatic.

Not leadership, but politics.

I think it's pandering.

Not leadership, but politics.

I generally do not believe it's honest.

I respect the Speaker of the house, I respect the governor tremendously, and as president of the Senate, they were all on board with this.

For every Democrat and Republican in the Senate unanimously to vote for this, where they are saying, particularly Republicans, that we can't afford it, you tell me, if you vote for something you think we can't afford but you vote for it because you think procedures will say, "You didn't vote for a tax cut," is that good leadership, or is that pandering to the lowest common denominator to gain some political points?

People can decide for themselves.

Rafael: Speaking of leadership, your new book is "lessons in leadership, 2.0.

The tough stuff."

Any lessons in your new book for the folks in Trenton?

Steve: I have no idea why that book is right behind me.

[LAUGHTER] Here is the message.

There is a chapter in the new book on ownership.

There is a book called "extreme ownership" written by two Navy SEALs.

Here is what it means -- own your mistakes.

Owned them quickly.

On them quickly.

Don't point finger at other people.

To say I was responsible for this, here's what I learn from it and here's what I will do moving forward.

Somehow that has become an impossible thing for most government and political officials.

I think it's the smartest and most appropriate leadership we need.

We need more of it in the White House, the Statehouse and every political office in this country.

Own your actions and stop blaming others.

Rafael: What is the one thing you have learned about leadership since your first book in 2016 they have included in this new book?

Steve: Other than other mistakes I have made?

The biggest thing I have learned, particularly since the pandemic, adapt, never assume the status quo is good enough.

Which is where you and I are doing this interview remotely.

For public broadcasting, we pivoted, we adopted and we evolved.

That never changes.

The status quo will never be the best option when it comes to leadership.

♪