Millionaire's Tax May Be Sticking Point In Budget Negotiations

NJTV News — March 20, 2019

BY Michael Aron, Chief Political Correspondent

Eighty-three people lined up to testify at the Assembly Budget Committee's daylong first hearing. Some asked for more money.

"We have too many educators who are taking home less pay every year. It's unsustainable for the great schools we have," Sean Spiller, vice president of the NJEA, said.

Some expressed thanks for deeds already done, like the new school funding formula.

"On behalf of our organization we thank you for carving out a true path to achieve full funding," said Fair Funding Action Committee Founder Jennifer Cavallaro-Fromm.

The requests reflect all the needs of society.

More money for security at places where hate crimes can occur.

"If such incidents can occur at a mosque in Christ Church, a synagogue in Pittsburgh, Pennsylvania, and a church in Charleston, South Carolina, houses of worship and religious community centers and people of faith in New Jersey are equally vulnerable," said Jacob Toporek, executive director of the NJ State Association of Jewish Federations.

More money to address high infant mortality rates in New Jersey.

"We support and ask that the Legislature support the $1 million for the maternal health doula program, as well as $8.7 million to expand Medicaid coverage 12 months postpartum," said Maura Collingsru, health care program director for New Jersey Citizen Action.

More money for school textbooks.

"Her social studies book is teaching her that Cory Booker is sill the mayor of Newark. It is older than my oldest child," said Andrea Katz, a member of the Fair Funding Action Committee.

The story line in this year's budget revolves around the millionaire's tax. For the second year in a row, Gov. Phil Murphy has proposed a nearly 2 percent increase in taxes on income over $1 million. And for the second year in a row, his fellow Democrats who run the Senate and Assembly are balking.

Before Wednesday morning's hearing, a small group of nonprofit leaders rallied to support the tax.

"We're here today to say that it is absolutely vital that we pass the millionaire's tax," said Ann Vardeman, program director for New Jersey Citizen Action.

Many of the speakers said they support hiking the income tax on the rich, but the business community spoke against it. It would raise $450 million in a $38.5 billion budget.

"In relation to the size of this proposed budget, the revenue from this tax increase is minimal. However, the impact it would have on our job creators would be tremendous," said Michael Egenton, executive vice president for government relations at the New Jersey Chamber of Commerce.

Assembly Budget Chair Eliana Pintor-Marin is being coy about the millionaire's tax. As part of legislative leadership she's aligned with those who are against it.

"I think we should raise taxes if we are in dire need to raise taxes, and I think that's been our conversation from day one," she said. When asked if we're in dire need, she said, "I don't know, we have to get through the budget first."

Her Republican counterpart, Assemblyman John DeMaio, would like to see more money going into the School Funding Reform Act, or SFRA, for direct aid to the public schools.

"We're expanding pre-K, we're giving out free community college, but we're not fully funding the SFRA. We really need to, for the sake of property taxpayers in the state of New Jersey, fully fund the school formula first before we ever look at adding new programs," said DeMaio.

"Although I would love to fund, fully fund, the school funding formula, I think that we all know that's just not possible. It will be at some point, just not right now," said Pintor Marin.

We routinely talk about a "budget battle." At this point it's unclear whether this year's budget involve an intraparty fight like last year's. If so, the issue could be the millionaire's tax.

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