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Battle Over Tax Cut Continues in Trenton

Saturday, June 30, 2012

New Jersey Governor Chris Christie has called a special session of the state legislature for Monday to consider his proposal to cut income taxes by 10 percent. It’s a measure that has been rejected by the Democratically-controlled state Senate and Assembly.

In Christie's letter to the Democratic legislative leadership regarding the special session he wrote his income tax cut was the way to “continue to move forward by letting people, and not government, enjoy more of the earnings produced by their own labor."

 

The unusual move comes the day after Christie lined item vetoed more than $360 million dollars in spending backed by the legislature. He also blocked the re-institution of the state's millionaires tax – marking the third time he’s struck down a tax increase on the state’s wealthiest earners. Christie said $70 billion in wealth left the state during the period the tax was imposed.

 

Democrats say Christie's income tax cut is too big a windfall for the state's wealthiest households that the state can't afford.

 

"We presented the governor with a budget committed to providing middle class property tax relief, and regardless of the governor's political theatre no tax breaks will even go into effect until 2013," wrote Democratic Senate President Stephen Sweeney in a statement. "While the last thing anyone wants in the middle of a heat wave is hot air coming from Trenton, we will be there."

 

A spokesman for Assembly Speaker Shelia Oliver had no comment on the special session but blasted Christie for his line item vetoes on Friday.

"The Assembly has no immediate response, but this much is clear - the governor just vetoed tax relief for the working poor and has repeatedly opposed property tax relief for the middle-class amid his manic zeal to protect tax cuts for the mega-rich," wrote Oliver's spokesman Tom Hester.

 

Governor Christie's budget, which included his tax cut, was predicated on tax revenues increasing 7.4 percent next year, almost twice as high as the national average for state predictions. Current estimates indicate the state's tax revenue are running between $700 million to $1.4 billion behind projections for this year and next.

 

Democrats committed to setting aside $183 million for a property tax cut later in the year, if the state's revenues could justify it.

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