5 Things In The Democrats' State Budget Facing A Christie Veto

NJ.com — Thursday, June 25, 2015

By Samantha Marcus | NJ Advance Media for NJ.com

TRENTON — Both houses of the New Jersey Legislature will vote on a state budget Thursday that is sure to face Gov. Chris Christie's veto pen.

State Democrats have countered Christie's $33.8 billion budget with their own $35.3 billion plan that adds $1.8 billion more for public employee pensions, raises taxes on the wealthy and corporations and increases aid to low-income workers.

That budget sailed through the state Assembly and state Senate budget committees Tuesday along party lines, while Republicans criticized the Democratic majority for relying on tax increases. Democratic leaders in both houses say the tax hikes are necessary to meet the state's obligation to government workers' pensions. The plan duplicates their efforts last year to raise more money for pensions. Christie was quick to veto the tax increases in that budget and is expected to do the same this year.

Here are five things about the Democrats that could be on Christie's chopping block:

  1. Millionaires' tax: Senate President Stephen Sweeney (D-Gloucester) proposed increasing the tax rate on income above $1 million to 10.75 percent. The current top tax rate, 8.97 percent, applies to all income over $500,000. Sweeney has said the hike will affect about 17,000 households earning more than $1 million a year and generate $688 million for pensions. It would sunset after four years.

  2. Corporation business tax surcharge: Democrats also attempted this tax on corporate profits last year. The one-year, 1.36 percent increase would raise $435 million for pensions. Business groups and Republican lawmakers opposing the pair of tax hikes say they will discourage economic growth by unnerving business owners who want predictability, not tax increases.

  3. Earned Income Tax Credit: Sweeney's millionaires' tax bill would reverse a cut Christie made to the state's Earned Income Tax credit for the working poor. Sweeney has said it will cost about $60 million to restore the credit from 20 percent of the federal tax credit to 25 percent. Roughly a half million low-income people lost, on average $117 a year when it was cut in 2010, according to New Jersey Citizen Action.

  4. Pensions: Democrats want to more than double funding for public worker pensions next year, from the $1.3 billion in Christie's budget to $3.1 billion. They pledged that amount despite a state Supreme Court decision from earlier this month that struck down a portion of the law requiring the $3.1 billion payment. Along with the funds from the millionaires' tax and business tax surcharge, they're counting on $725 million in newfound revenue — $300 from this year and $425 from the upcoming year — to help them make the contribution.

  5. Women's health clinics: Christie has vetoed money for women's health and family planning centers five times. For years, the governor said he eliminated the funding for budgetary reasons or because those services were available elsewhere, but in a February appearance before a national conservative group he connected the vetoes to his anti-abortion beliefs. The Democrats' budget again includes $7.5 million for those clinics, which include some run by Planned Parenthood.
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