TRENTON – Gov. Chris Christie asked state lawmakers to pass a tax cut plan this week during a special session of the Legislature on Monday.
Christie called the legislators back to Trenton after using his line-item veto to pare $86 million from the Democrats’ state budget on Friday and rejecting a second bill that would have provided $50 million to fully restore the Earned Income Tax Credit to help New Jersey’s working poor.
“Giving the certainty of tax relief to our citizens and making our state more competitive with our neighbors in job creation—today—will allow us to put more New Jerseyans back to work this summer,” said Christie. “What could be more important for us to do today?”
The governor abandoned his initial plan to phase in a 10-percent across-the-board state income tax cut and instead called on lawmakers to pass a proposal put forward by Senate Democrats to give residents an income tax credit worth up to 10 percent of what they pay in property taxes.
The budget that went to the governor’s desk last week did not include a tax cut because lawmakers were concerned that the Christie’s revenue projections were too optimistic. Democrats had set aside $183 million for tax relief in 2013 and planned to work out the details if tax revenue collections met targets during the first half of the fiscal year that began on July 1.
Today, Christie conditionally vetoed a Democrat-sponsored bill to re-introduce a “millionaires tax” and returned it to the legislature with amendments to deliver tax relief. The amended legislation would provide New Jersey residents with household incomes up to $400,000 an income tax credit equal to 10 percent of their annual property tax bill for the prior year, up to $1,000 when fully phased in after four years. Net-profits from a trade or business (derived from federal Schedule C income) would not be counted against the household income threshold.
The governor’s proposal also included a phased-in restoration of the Earned Income Tax Credit. At 25 percent of the federal tax credit, the state EITC would be fully implemented in taxable year 2013, providing a $550 benefit to the average eligible beneficiary. Last week, Christie vetoed a Democrat-sponsored bill that would have fully restored the tax credit for the 2012 tax year.
“A bipartisan tax cut plan is on all of your desks right now,” Christie said. “Let’s show our state we can work together and finish the job before we leave for this holiday weekend.”
Senate President Stephen Sweeney said that today’s special session was unnecessary political grandstanding. “[W]e’ve already placed in the budget the money for a tax cut,” Sweeney said. “Hopefully the people in this room will let the people in this state understand that what the governor is talking about is more theater for the national stage.”
“Today’s harangue by Governor Christie represents the height of hypocrisy,” said Assembly Deputy Speaker John Wisniewski (D-Middlesex). ”He raised taxes on New Jersey’s working poor in his first budget and now he’s vetoed the Earned Income Tax credit, which would have cut their taxes…. He crafted outrageously inflated revenue projections that even he doesn’t believe in an effort to game the system and now he’s angry that Democrats have taken a more responsible path to middle class property tax relief.”
Some have questioned whether a tax cut is really in New Jersey’s best interest. New Jersey Policy Perspective President Gordon MacInnes suggested that it could be more productive to spend the money to support higher education to increase the number of people who earn degrees in mathematics, computer science, genetics and nanotechnology and similar fields to ultimately aid the science, research and technology industries that originally brought prosperity to the state.