TRENTON — The Democrat-controlled Legislature passed a $32 billion state budget on party-line votes Monday, sending the spending plan to Republican Gov. Chris Christie to see which parts he will keep and which he’ll veto.
Spending in the budget adopted by lawmakers is mostly the same as what Christie proposed. But there’s one difference that’s sure to prompt a stare-down, if not one or more line-item vetoes from the governor: Christie wants to begin in January to phase in a 10 percent tax cut at a cost of $183 million this year. Democrats have insisted the cut should come to property-tax bills rather than income taxes, a switch that would benefit lower-income and middle-class homeowners and a plan Christie has all but said he would cede to.
But the bigger dispute is that the Democrats say the revenue projections Christie is relying on are overly optimistic. They want to hold the $183 million for a tax cut in escrow until January, when they would pass a separate law to authorize the cut — or not, if they felt revenue didn’t support it.
Christie said tax relief for families is long overdue and that’s what he’ll continue fighting for.
“I will not allow New Jersey to go back to the same failed policies that nearly put our state over a fiscal cliff,” he said in a statement after the votes Monday.
He has warned residents that the Democrats would find an excuse to have the Legislature spend that money instead of having it sent back to taxpayers. He has threatened to use his veto pen on the budget to cut programs and services Democrats want to fund if the tax cut is not guaranteed to take effect in January. He has until the end of the week to act.
During Monday’s Senate debate, Republicans defended the governor’s stance that the state’s economy is bouncing back and that the taxpayers deserve a cut after years of sacrifice.
“The sponsor was able to find $140 million in cuts to various line items so that the money could be redirected to legislators’ priorities, but we’re impounding just about the same amount of money for a tax cut because we’re not sure we can afford it?” asked Sen. Anthony Bucco, R-Morris, Somerset.
Assemblyman Gary Schaer, D-Bergen, Passaic, vice chairman of the budget panel, made the case for deferring the tax cut and cast doubts on how much the state’s economy has recovered from a deep recession.
“I believe the people of New Jersey, more than they want a tax cut, want a fiscally responsible Legislature,” he said.
Schaer reiterated the fiscal projections of the Legislature’s budget expert, who estimated that revenue collections could be off from Christie administration estimates by as much as $1.4 billion through July 2013.
“What’s the problem with ‘Show me the money?’” he asked, evoking a popular line from the movie “Jerry Maguire.”
Assemblyman Jay Webber, R-Essex, Morris, Passaic, said the Democrats have the wrong approach.
“I think the budget gets its priorities wrong,” he said. “With this budget, the Democrats are telling the people of New Jersey they have 31.7 billion things better to do than provide tax relief.”
Democratic lawmakers added $25 million to funding for nursing homes and promised savings from a reduction in the size of the state government work forces, among other changes to Christie’s proposed budget.
Assemblyman Matthew Milam, D-Cape May, Cumberland, Atlantic, said, “I think there’s a lot of good things in it.” He said the budget gave Christie much of what he wanted, while giving the Legislature what it wanted. “I think in the end of the day that’s going to help” in getting the governor’s approval.
Assemblyman Chris Brown, R-Atlantic, said he believed the budget sent the state in the wrong direction, and was similar to budgets passed during the eight years under Democratic governors prior to Christie.
“One of the problems with the bill is it attempts to spend money we don’t have while raising taxes,” Brown said. “If any taxpayer ran his home budget or his business like the state, he’d be bankrupt and in jail.”
Sen. Jim Whelan, D-Atlantic, said “the fact that this actually reduces spending by $60 million (from Christie’s proposal) is a positive.” Whelan added that he considered revisiting the tax cut later in the year if state revenue grows to Christie’s projections to be “responsible.”
“Basically, we’re saying if the protections are there, then we can do a tax cut,” Whelan said. “If they aren’t, we’re going to take a more cautious approach.”
Sen. Jeff Van Drew, D-Cape May, Cumberland, Atlantic, said he believed the budget was good, sound and fiscally responsible, as well as 98 percent identical to Christie’s proposal.
“We should also at the same time be looking to grant some tax relief to the constituents of the state of New Jersey who have labored long,” he said in a statement, adding he was disappointed that a tax cut was not simultaneously approved for state residents. He supported a proposal that would give a 10 percent property-tax cut, credited against state income taxes.
Staff Writer Derek Harper contributed to this report.
How your lawmakers voted
1st District (Cape May, Cumberland, Atlantic)
Sen. Jeff Van Drew (D): Yes
Assemblyman Nelson Albano (D): Yes
Assemblyman Matthew Milam (D): Yes
2nd District (Atlantic)
Sen. Jim Whelan (D): Yes
Assemblyman John Amodeo (R): No
Assemblyman Chris Brown (R): No
9th District (Ocean, Burlington, Atlantic)
Sen. Chris Connors (R): No
Assemblywoman DiAnne C. Gove (R): No
Assemblyman Brian Rumpf (R): Absent