Asbury Park Press

Christie, NJ Democrats Battle Again Over Tax Cuts

Asbury Park Press — Monday, July 2, 2012

Written by
Geoff Mulvihill
Associated Press

TRENTON, N.J. — New Jersey Gov. Chris Christie on Monday vetoed Democrat-backed legislation to increase taxes on millionaires to pay for tax cuts for almost everybody else, the centerpiece of a day of political bickering and accusations but little action over the principles and politics of taxes.

It was the third year in a row that New Jersey's Democrat-controlled Legislature passed such a bill and the third year in a row that Christie vetoed it.

But this time, the Republican governor took a different approach.

He called lawmakers, who would normally be on vacation after passing the budget, back to Trenton for a special session where he unveiled an alternate tax plan. His latest proposal: Use some of the $361 million he cut last week from the state budget with a line-item veto to pay for property tax cuts for any homeowner with a household income under $400,000 and for an expansion in an earned-income tax credit for the working poor.

Legislators showed up in Trenton, but they were a bit grumpy about it. An Assembly news release took Christie's office to task for telling news outlets that no flash photography would be allowed in the Assembly chambers for his speech. Flashes, the Assembly very publicly assured journalists, would be OK.

Lawmakers said they would not vote on Christie's plan, which they derided as "theater."

"This was completely unnecessary because we've already placed in the budget the money for the tax cut," said Senate President Stephen Sweeney, a Democrat from West Deptford. "The tax cut won't take effect until next year."

Indeed, lawmakers last week approved a nearly $32 billion budget. Christie signed it after nixing $86 million worth of spending through by using the line-item veto.

One provision in the budget was to set aside $183 million for a tax cut that Christie wanted. But Democratic lawmakers — like some independent economists — believe that Christie's revenue projections are too optimistic. They say they will pass a bill later this year to authorize the cut to take effect only if state's finances can handle it. They have not detailed exactly who would qualify for the tax reduction, or how big it would be.

Both sides are talking about a tax cut that would take effect early next year. But Christie wants lawmakers to guarantee it now.

"I have used my veto authority on the budget you sent me to create a $650 million surplus. Can't we afford to send just one-third of that surplus back to our citizens and to give them that guarantee today?" he asked during his speech to lawmakers. "I say yes."

Democrats said no, and left the State House without voting after Christie's speech.

Each party accused the other of opposing tax relief for the middle class — a group in New Jersey whose major complaint is about property tax bills that cost the average homeowner more than $7,700 per year, the nation's highest.

"New Jerseyans are suffering under this governor," Assemblywoman Bonnie Watson-Coleman, a Democrat from Trenton, said in a statement, "and it's time to put the theater aside and confront reality, and the reality is that Democrats have offered tax relief only to see it rejected by this governor over and over again."

Christie, meanwhile, blamed Democrats from blocking tax cuts.

"You used my revenue projections to spend on programs throughout the state," he said, directing his remarks at Democrats. "If my revenue projections were good enough for your spending, why are they not good enough for the people's tax cut?"

Some liberal groups complained that Christie is using the state's working poor as "pawns" in the debate over tax relief by including the earned income tax credit in his plan.

"Holding that money hostage to pay of a tax cut is unconscionable," said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action.

Christie said he would agree to expand New Jersey's earned income tax credit program to 25 percent of the federal amount, up from 20 percent. About 500,000 families would see their tax credit grow, with the average jumping from about $430 to $545 per year.

Earlier this year, Christie said he wanted to expand the program, which he had scaled back during a budget crunch two years ago. But when he proposed his budget, he did not call for the expansion.

Democrats included it in the budget they adopted. But last week, Christie used a line-item veto to block the expansion.

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