Title: New Jersey Politics Round-Up

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Brian Lehrer: Brian Lehrer on WNYC. Now, for a look at the latest political news coming out of New Jersey. We've been covering Mayor-elect Mamdani's transition pretty extensively. Now we'll check in on Governor-elect Mikie Sherrill as she prepares to assume office. That's going to be on January 20th in New Jersey. In the city, it's New Year's Day when the mayor is inaugurated, but what about Mikie Sherrill's seat in Congress? There's already a crowded field of candidates competing for that open seat, and there are some interesting dynamics at play there. For starters, it seems like a proxy war between Governor Murphy's family and Senator Andy Kim is already brewing.

There's some unfinished business from Election Day in Jersey City. As those of you there know, tomorrow voters will choose in a runoff election between two Democrats, according to our guest, WNYC and Gothamist New Jersey reporter Mike Hayes. The big issue is housing. In that runoff, we'll see where the candidates agree and where they diverge ahead of Election Day, part two, in case any of you Jersey City listeners remain undecided. With me now is WNYC and Gothamist's New Jersey reporter Mike Hayes. He's also author of the book The Secret Files: Bill De Blasio, The NYPD, and the Broken Promises of Police Reform. Hey, Mike, welcome back to the show.

Mike Hayes: Hey, Brian, thanks for having me.

Brian Lehrer: All right. James Solomon versus former governor Jim McGreevey in this runoff election in Jersey City tomorrow morning. I heard your piece on Morning Edition today, and you have the print edition on Gothamist, the thesis that their major disagreement is on the issue of affordable housing in Jersey City, as in almost everywhere else, but how do they differ?

Mike Hayes: Yes, it's interesting, Brian. One of the reasons we're able to dissect this is that since the November election, these two candidates, Councilmember James Solomon and former governor Jim McGreevey, they've been meeting up, doing a whole bunch of debates, and really been hashing this out a lot, which is, in part, great to see, but there's one specific area, Brian, where they really differ here. I think this really gets to the crux of who these guys are as candidates. James Solomon, who's run this real kind of populist insurgent campaign, has this idea. He wants to inject thousands of apartments, affordable apartments, into Jersey City, where the rent would be capped at $1,000, and possibly as low as $750.

Now, that's substantially lower than the market rate in Jersey City. McGreevey has been verbose, to put it mildly, about why he thinks that this just flat out won't work. He calls it a math problem. He calls it fantasy thinking. He believes that to create these apartments would also create a $3 billion tax hit to property taxpayers in Jersey City. Now, Solomon has been a little bit vague on rebuffing that argument, on explaining how this would work, other than to say that rich developers coming into Jersey City would subsidize this. They would cover the tax shortfall here.

More specifically, he's used this, Solomon, that is, as a way to say that McGreevey's really being a no person here. He's being negative, he's not offering any alternative solutions. Brian, just a bit of irony, as I've been looking into this, is when you talk about-- yes, there is this heavy debate over these thousand-dollar rent-capped apartments, but these two actually agree on a lot of stuff. Housing is a prime example here. They're both for mandatory 20% set-asides for affordable housing. They're both for limiting tax abatement, sweetheart deals for developers.

Even on the public safety side. They both want to put more cops on the street doing community policing. It's been interesting to follow how they diverge on this $1,000 a month rent cap.

Brian Lehrer: Take me one layer deeper on this thousand-dollar rent cap because I'm sure people's ears in New York City and elsewhere are perking up at this idea. How does Salomon argue, if you know, how it would be financially feasible? I think what we hear generally in the city, for example, is that 80-20 formula that you say they agree with, 20% affordable, has been unsatisfying to a lot of communities, a lot of housing advocates, because it still means you can put 80% of new units out on the market for luxury prices in a particular area, so the net effect is gentrification.

If you're going to have a larger percentage of really below market rate, then the developers aren't going to make enough money to even get in the game. How does Solomon cost this out, and what would the incentive be for developers to build a lot of buildings where you can't charge more than $1,000 rent?

Mike Hayes: Yes, it's a real interesting conundrum, Brian. There's multiple layers that we could go deeper here. Focusing on the Solomon side of things, like I said, he's been pretty vague on how this would work. Folks seem to like his message that, "Hey, I'm going to get the developers to pay for it." Another fact he leans on here, Brian, is the framework for charging these lower rental rates in Jersey City does exist in a certain respect with federally subsidized apartments, where lower-income residents pay no more than 30% of their income, but going back to McGreevey really quickly, politically speaking, he's taken a very hard line on this issue to say, "The math is just not going to work here."

As far as developers go and how this could work for Jersey City developers, you're seeing a lot of developers come in building high rises, building very, very impressive pieces of real estate. Yes, I have heard from some developers that concern does exist, that there's a math problem on their end here. They're also very concerned about what both these candidates are saying about on the tax abatement side, because that would be one way, just speaking strictly from a budget standpoint, that this problem could be solved for a developer to be able to get tax credits.

Depending on which way this goes, and if Solomon is elected and he gets aggressive about trying to enact this policy, you could see some very interesting interplay between Jersey City and what happens on the federal side with federal tax cuts for developers, because it sounds to me like to do a lot of this stuff and to make it work for developers, those tax cuts that they rely on to make a profit would need to stand.

Brian Lehrer: That's why there might be property tax implications, so they get enough money into the system for those subsidies?

Mike Hayes: Correct, yes. McGreevey is basically arguing that Solomon's whole developer scheme is going to blow up here and that the burden is then going to be placed on taxpayers. When he makes that argument, he's not without some very recent precedent in Jersey City. Taxes have been going up and up and up as rent has been going up. It's part of the reason why, in this particular part of New Jersey, folks are so enraged, really, is how I would put it, about the affordability problem. That's where these two candidates stand. They've made very different arguments, and we'll see what happens when folks-

Brian Lehrer: Tomorrow.

Mike Hayes: -hit the polls tomorrow.

Brian Lehrer: Onto Mikie Sherrill's transition, she'll be taking office on January 20th. You write that the governor of New Jersey is among the most powerful top state executives in the country. What is she saying she's going to do? We're hearing so much about the Mamdani transition. How's the Sherrill transition going?

Mike Hayes: Yes, she doesn't take office for almost two months, but that's not stopping-- the work has started. Now she's announcing cabinet positions. A big example I always think of when you bring up that point, Brian, about how powerful the New Jersey governor is, is you think about the power to appoint an attorney general. Now, the attorney general still needs to go through a confirmation process. The legislature does have a hand there, but it's not a given, depending on where you're a governor in this country, that you'd have that power. Now, coming off of her election, Mikie Sherrill herself declared that she has a big mandate, given the decisiveness of her 15-point victory.

What I'm watching right now, we're still waiting, Brian, to see how she'll make good on this promise to freeze energy rates on day one. Now, she's laid out a series or a set rather of transition task forces. One of them is called the Making Energy More Affordable and Reliable Task Force. It's co-chaired by a woman named Allison Clements. She's former commissioner of the United States Federal Energy Regulatory Commission. Her co-chair is Jennifer Granholm, a former US Secretary of Energy. They both served in Washington under Joe Biden, so there's some heavy hitters there.

Sherrill is also making a lot of headlines right now with how she might fight back against policies by the Trump administration she doesn't like. She was on Jon Stewart's podcast talking about actually withholding federal tax dollars. She called this a great idea. In some respects, it's not surprising to hear Sherrill with that sort of rhetoric, Brian. During the campaign, she talked a lot about Trump's canceling of federally appropriated funds for the Gateway Tunnel project, the hundreds of millions of dollars in Medicaid subsidy cuts for New Jersey. Now, there's a fundamental problem here, though, with this withholding idea. The state doesn't collect those federal tax dollars.

Gavin Newsom actually threw out the same idea for California, and then he backed off on it. This sort of talk from Sherrill, it says to me that this topic of going to war with Trump over federal dollars is firmly in her sights. Some of the biggest applause lines that I heard when I was following her around during the campaign was around clawing back the Gateway money, clawing back the Medicaid money. We'll see how this fight with Trump emerges in the current weeks. There's also a legislative idea being floated in New Jersey to ban ICE agents from wearing masks in the state. Mikie Sherrill says she supports that.

That caught my eye because other legislative ideas have been thrown out. You haven't seen her weigh in on it yet. One more big topic here, Brian, on the Sherrill transition, or I guess more about her, what she's going to do after she immediately takes office. It's not as headline-grabby at the moment as some of that other stuff I just mentioned, but the New Jersey budget crisis is going to hit Mikie Sherrill's desk the minute she gets to Trenton. Budget watchdogs, political experts say, her administration, they're going to need to make hard decisions. The Medicaid dollars won't be there. There's also the notion of the COVID federal subsidies that have cushioned the budget also won't be there.

I was on with you the day after the election. I made an analogy comparing Mikie Sherrill to Shohei Ohtani, given how decisively she won that election. I got another baseball one for you when we're talking about the New Jersey budget. She's going to have to play Moneyball, Brian, when she gets to Trenton because of this budget crisis.

Brian Lehrer: Is she saying anything about raising taxes to deal with the budget deficit?

Mike Hayes: She's not saying anything herself specifically on that. She actually very much talked about not wanting to do that. I'm thinking specifically about her on the debate stage against Jack Ciattarelli, her Republican opponent in the race. However, I think there's some gray area there, Brian, if we're talking about the whole universe of raising taxes. She has supported what Governor Murphy did around the millionaire's tax and raising taxes on some higher income individuals in the state, as well as raising property, or I should say taxes on home transfers of over multimillion-dollar home transfers. Yes, there's that sort of talk going on right now. We'll see what happens when she gets Trenton.

Brian Lehrer: It's just starting. Of course, the other side of that is budget cuts to programs and services that New Jerseyans rely on, if you're not going to raise taxes and you're facing a revenue shortfall. That's why, as you say, "With great power comes great responsibility." We'll see how she starts to balance that. Last thing, though, on the loss of money coming from Washington and trying to claw back that Gateway Tunnel money and other things, is Sherrill planning on meeting with President Trump, like we saw Mamdani do a few weeks ago? Trump, of course, came out saying, "I want to help him, not hurt him." Is Sherrill requesting a meeting with the president, as Mamdani had done?

Mike Hayes: I have not heard anything about that, Brian. I would be pretty surprised if I did. She made it very clear on the campaign trail that she wants to be a fierce opponent of Donald Trump. Of course--

Brian Lehrer: As did Mamdani.

Mike Hayes: That's correct, yes, but maybe as a nice bookend of Andrew Cuomo's involvement in this chapter of the American Experiment, to quote his father, Mario Cuomo, "You campaign with poetry. You govern with prose." Perhaps we could see Sherrill take a little bit of a different tact, but I've heard the word lawsuit 10x times compared to the word meeting when we talk about Mikie Sherrill and Donald Trump.

Brian Lehrer: Of course, the incentives for Trump might be very different when it comes to how he approaches Mikie Sherrill than how he approaches Zohran Mamdani, even though that surprised people a lot. I'm sure Sherrill's people have to read the room and figure out if there's the prospect for as successful a meeting as Mamdani had. We will have to leave it there. My guest has been Mike Hayes, WNYC and Gothamist reporter covering New Jersey these days, and author of The Secret Files: Bill De Blasio, The NYPD, and the Broken Promises of Police Reform. Mike, thanks as always.

Mike Hayes: Sure. Thanks for having me, Brian.

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