Governor Christie Signs NJ Budget, Tax Issues Remain Unresolved
TRENTON, N.J. (AP) – Gov. Chris Christie has signed a budget that keeps New Jersey government humming along through next June, but with a millionaires’ tax and property tax cut still unresolved, the partisan fiscal fight between the governor and the Democrats has spilled into summer.
Now, Christie has ordered the Legislature back to Trenton on Monday to address the dangling tax relief question.
Christie brandished his red veto pen to slice Democrat-backed programs before signing the $32 billion budget into law on Friday. But he deferred action on the centerpiece of their fiscal plan: a tax hike on the rich to fund a tax cut to the poor.
Assemblyman Lou Greenwald’s bills authorize raising the income tax rate on 16,000 million dollar-plus earners by nearly 2 percentage points and using the $800 million in additional revenue to restore property tax rebates to the elderly and disabled and homeowners making less than $100,000 a year. Christie changed the rebates into tax credits _ no more gimmicky checks _ and trimmed the benefit last year.
Christie told The Associated Press on Friday he would take the weekend to decide what to do _ not whether to veto the proposal, he’d done that twice before _ but how creative to get with this, his third rejection of a millionaires’ tax.
“I haven’t made a decision yet on what I want to do exactly,” Christie said, acting like a fisherman who’s got a bite on the line. “I have the bill, I’ve read it, and I’ll make a decision I suspect over the weekend.”
Asked about the buzz around the Statehouse that Christie planned to turn the tax credit bill on its head and morph into his tax cut, Christie didn’t tip his hand.
“I’m a really creative guy, I’ll see what I can do,” he said, smiling.
The governor has the authority to call the Legislature back to the Capitol, but he can’t make lawmakers act. Legislative leaders could show up at the Statehouse, declare there’s no quorum and go home.
If it sounds as though the governor may have Democrats over a barrel on the millionaires’ tax, they may have the upper hand on the signature issue of Christie’s budget: a 10 percent tax cut.
Christie proposed the cut in February, and included $183 million for the first installment in his budget. Democrats included the funding in their budget, too, which Christie signed, but they won’t pass legislation to release the money until January _ if the state can afford it. Christie agrees the cut should start in January _ the budget only funds it for six months of the fiscal year _ but he wants a commitment that Democrats will deliver, which they so far have refused to give.
Democrats and some economists say the Christie administration is relying on overly optimistic revenue growth for the coming year, and that the numbers won’t materialize. In other words, they argue, the state won’t take in as much tax revenue as Christie projects, so it won’t be able to afford even a modest reduction in residents’ tax bills.
“They passed a budget, their budget _ they didn’t negotiate a day with me _ that uses my projections,” Christie said. “The fiscal irresponsible maneuvering this year by the Democrats is, they complain about my projections but they spend every nickel of them. The only thing they won’t spend my projections on is tax cuts.”
Christie contends Democrats back-pedaled after he agreed to go along with their plan for property tax relief that benefits the middle-class rather than the income tax cut he sought, which disproportionately benefits the wealthy. He’s already taken to the bully pulpit, and has promised to keep berating Democrats “all hot, long summer” until they relent.
“I am going to travel all over the state of New Jersey and I am going to point out to every living breathing New Jerseyan I can find that these folks lied to you; they lied to me,” Christie told a recent town hall audience. “I am going to kick their rear ends from one end of the state to the other to get you a tax cut.”
That doesn’t sound very bipartisan, for a governor who touts his ability to get things done with Democrats (including an ambitious higher education overhaul approved Thursday to give Rutgers University a medical school and greatly expand the health sciences curriculum offered in South Jersey).
“It’s not,” said Christie. “I still think we have a great record of bipartisanship this session. It fell around the issues of taxes and spending.”
Where do you stand on the tax issue in New Jersey? Let us know in our comments section below…
(Copyright 2012 by The Associated Press. All Rights Reserved.)