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Dems Say Christie Tax Cut Weighted for Rich, Puts School Dollars at Risk

Wednesday, January 18, 2012

Halfway through his first term, New Jersey Governor Chris Christie called for a 10-percent income tax cut for all brackets and a revival of the state's Earned Income Tax Credit for the working poor hands the — and handling the Democrats a real rhetorical challenge.

Christie cast the across-the-board income tax cut during his State of the State Tuesday as yet another way that New Jersey could make itself more competitive in a period where other states were raising taxes. Decades ago, the state's income tax was enacted to help reduce the state's reliance of local property taxes to fund public schools.

But Senate president Steve Sweeney told the reporters the tax cut would cost the state a billion dollars, would mostly go to the state's wealthiest households, while starving the public schools of needed state aid.

"Its another windfall for multimillionaires at the expense of the schools because that's where the money comes from," Sweeney said.

Democratic Assembly Speaker Shelia Oliver said she welcomed Christie's support of the Earned Income Tax Credit for the working poor "which he vetoed twice" but said it should not be contingent on the income tax rate roll back.

"If you do the research look at the numbers," Oliver said. "Someone that earns $50,000 will get $80.50 while someone who earns a million dollars will realize $7,265 a year."

Christie's tax cut plan has plenty of boosters. Phil Kirschner, president of the NJ Business and Industry Association, described the proposal as a breakthrough and in line with Christie's two-year track record.

“Governor Christie’s bold plan to cut New Jersey’s income tax rates for all New Jerseyans will boost the state’s economy and encourage businesses to expand and create jobs for New Jersey workers," he said.

But over the past two years, job creation has appeared to be somewhat stagnant. New Jersey's unemployment is still stubbornly high at 9.1 percent, above the national rate of 8.5 percent.

In his speech, Christie cited a Rutgers analysis that showed that in 2011 the state had its best private sector job growth year going back 11 years to 2000. But the Star Ledger has reported that while the state added more than 62,000 private sector jobs on Christie's watch it also lost 24,000 public sector jobs that Senate Majority Leader Loretta Weinberg said were good paying jobs with benefits like healthcare.

Hetty Rosenstein, director of the Communications Workers of America, which represents the state's unionized workforce, said when it came to helping create the climate for job creation New Jersey was lagging behind not just the nation but the region.

"Since Governor Christie took office, Pennsylvania has created four jobs and New York five jobs for every one new job in New Jersey," Rosenstein said. "It is no surprise that with his failed jobs record, the governor is anxious to change the subject, with even more tax cuts for the rich and new attacks on the thousands of men and woman who dedicate their careers to public service."

The one area of  Christie's speech which did win a bi-partisan ovation was his call to require that all of the state's non-violent drug offenders get mandatory drug treatment.

Historically New Jersey looked at drug use as a criminal matter not a public health issue.

While calling for a change in state law to make it harder for violent felons to get bail when they are arrested, Christie said the state's philosophy on combating drug abuse needed to evolve.

"Experience has shown that treating non-violent drug offenders is two-thirds less expensive than housing them in prison," Christie told legislators.

Democratic Senate Majority Leader Loretta Weinberg praised the governor for his stance on the policy.
 
"I jumped up and applauded when he said everyone deserves a second chance," she said.

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Comments [1]

Matt from New Jersey

The democrats in NJ are correct that income tax reductions could put some school funding at risk. The question is whether or not that matters. The bulk of NJ state income taxes go to fund what are known as Abbott District schools.

These schools cover 5% of districts and 20% of students and get 60% of income tax funded school aid. After years of obfuscation, in 2011 NJ provided the full per pupil costs for these Abbott schools. Turns out they spend 22% more than the non-Abbott average of $17,200 per student.

So, after decades of spending, has there been any meaningful improvement? Well, if you're a fouth grader, the answer is yes. However after the fourth grade, student performance rapidly declines so the are doing as badly as they did before the massive influx of court ordered spending.

In summary, the sad story can be read here at a 2009 columbia teachers college forum, http://www.tc.columbia.edu/news.htm?articleID=7240

And I quote, "Gordon MacInnes, a fellow at the Century Foundation who oversaw implementation of the Abbott decisions as Assistant Commissioner at the New Jersey Department of Education from 2002 to 2007, delivered a mixed assessment. The gap in “life chances” between poor and middle-class and wealthy students in New Jersey and across the nation is “still substantial,” he said. “When you get to middle school, eighth grade, high school – forget about it. This has been a huge failure.”

So who has benefitted from all that fat spending on Abbott schools? Since most of the cost is salaries to administators and teachers, it's pretty obvious why the unions and their political appointees are fighting to keep income taxes high.

Jan. 18 2012 02:45 PM

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