Not like this is accurate, but Murphy only winning by like 5-10 would be unsurprising. NJ does not like to vote for the in-party in gubernatorial elections. Murphy has been quite divisive as well, given his strict COVID policies. I do think that he has avoided reinstituting a mask mandate to avoid criticism in the run-up to his reelection.
also, NJ doesn't seem that upset at the COVID policies. Murphy has enjoyed a positive approval rating since last year.
NJ's policies are quite lax currently. A year ago they were maybe the strictest in the nation. Polling around COVID policies seems unreliable to me, in polls people indicate a willingness and approval of stricter policies than in practice.
