N.J. Democrats Bring Back Idea Of Millionaires' Tax To Balance Budget
TRENTON, N.J. (CBSNewYork) -- New Jersey lawmakers are trying to hammer out a budget and avoid a government shutdown.
CBS 2's Christine Sloan reports that one idea is to get millionaires to pay more taxes, but critics say it could hurt the middle class. They better see eye to eye soon. The budget has to be passed by midnight Thursday.
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As the budget battle continues in the Garden State, Democrats brought up an old idea on Monday, legislation that would tax millionaires even more -- from the current 8.97 percent to almost 11 percent.
The money would go to suburban school districts.
"A lot of millionaires out there that can help support the education of young children and it would be great," said Spencer Raymond of Lodi.
Democrats say a millionaires' tax would generate more than $600 million for suburban school districts that have seen cuts in aid, but the Chamber of Commerce said it's a bad idea, putting New Jersey at a disadvantage and hurting middle class workers at companies that could leave the state if the tax burden gets too high.
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"We don't want to see a headline anywhere in the country saying New Jersey increases income taxes again to become number one in the country in income tax burden. That is not a good thing when you're trying to bring jobs and investment into the state," said Paul Boudreau of the Morris County Chamber of Commerce.
The plan to tax people who make more than $1 million comes after an historic deal between Republican Gov. Chris Christie and Democrats that forces public workers to pay more for their pension and health benefits. The Senate gave final approval to the bill that would raise pension and health benefit costs to more than 500,000 government workers. Christie is expected to sign it quickly.
"He's asked everybody else to step up to the plate to pitch in, share in the sacrifice and today we're asking those who make over $1 million to do the same," state Sen. Paul Sarlo said.
"Unfortunately, the Legislature has dragged its heels and here we are with a week to go," said Republican Sen. Joe Kyrillos of Monmouth County told WCBS 880's Levon Putney. "They're spending extra money -- perhaps $400 million or $500 million more. And the governor won't put up with it."
In Pennsylvania, the top income tax rate is 3.5 percent. It's 6.5 percent in Connecticut. New York's millionaires pay 8 percent, but that rate will go down. Christie is against extending New Jersey's millionaires' tax. Republicans say Democrats are just fueling the fire.
"For them to go through this ritual, this dance that they're going to have this additional $600 million, it's just not there and a false promise to the public once again," Sen. Kevin O'Toole said.
Christie said he will veto any legislation that will tax millionaires more.
A balanced budget must be in place by July 1, or the state technically runs out of money and government shuts down.
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