Lawmakers plan to take on the state’s $31.7 billion budget today, setting up a showdown between the Democratic-majority legislators and Republican Gov. Chris Christie over a central tenet of Christie’s budget proposal.
The Senate Budget and Appropriations Committee approved the bill Thursday, and the Assembly Budget Committee followed suit the following day.
The budget plans are broadly similar to the proposal laid out by Christie in February, with one major difference: Instead of an automatic 10 percent income-tax cut phased in over three years, Democrats set up a $180 million tax-cut proposal that would base a credit on the size of a resident’s property-tax bill.
But the proposal wouldn’t take effect unless the state next year hits the aggressive state revenue growth targets Christie projected earlier this year. And that appears less than likely, as the state continues its slow climb out of recession.
The state posted a 9.2 percent unemployment rate in May, the same month the administration said the state could miss its revenue targets by $676 million over the next year, while the nonpartisan Office of Legislative Services estimated that figure to be as high as $1.3 billion.
Assembly Budget Committee member John Burzichelli, D-Salem, Gloucester, Cumberland, said during Friday’s meeting that lawmakers were leery that the state would be unable to hit Christie’s revenue benchmarks, which makes the funding of additional tax relief an uncertainty.
“We have collectively said, from outside of the aisle, we have concerns about how the governor has structured the revenue,” he said.
Separate from that concern, Burzichelli said he believed many bills passed this session already contained tax relief for individuals and businesses, such as through easing of regulatory oversight and other programs.
In a statement Friday afternoon, Assemblyman John Amodeo, R-Atlantic, backed Christie’s proposal and criticized the Democrats.
“The Democrat-sponsored budget is shaping up to be nothing more than a continuation of the failed policies of (former Democratic Govs. Jim) McGreevey and (Jon S.) Corzine,” Amodeo said. “The only thing surprising is how quickly their decision to join with Republicans to provide much-needed tax relief has faded. Instead, they have returned to the idea of milking every last dollar taxpayers earn. Even if we accept their wait-and-see approach, they aren’t promising the tax relief families so desperately need will ever materialize.”
Amodeo then said he wanted to study the Democrats’ proposal in more detail, particularly the creation of the property-tax relief fund.
“It’s probably not a bad idea, but the bottom line is, I think we can work that property-tax relief program directly into this budget,” he said.
Amodeo said he believed Christie would not accept anything short of immediate tax relief.
“The governor’s not going to wait,” he said.
In the Senate, Sen. Jeff Van Drew, D-Cape May, Cumberland, Atlantic, said he would have preferred to negotiate the budget with Republicans and the governor, adding, “I would have much preferred we had the tax cut,” saying there was available money in the state’s surplus.
“It’s not always noble to increase taxes or have a fee increase,” said Van Drew, who is on the budget committee.
Locally, he said, money for beach replenishment and tourism promotion remains untouched, although he said he was unable to change the payment-in-lieu-of-a-taxation system, which compensates municipalities for otherwise untaxable public property. This is a major issue for smaller, rural municipalities in South Jersey with sizable tracts of state-owned land.
Sen. Jim Whelan, D-Atlantic, said Thursday that he was concerned about the fact that the proposed budget would spend more money than last year’s but called this year’s budget “responsible.”
Everyone wants to cut taxes, he said, “but the idea is, how do you pay for it?” If the state gets the growth it was projecting, then the tax-cut discussion can be revisited, he said; otherwise, it would be a bad decision to borrow to pay for a tax cut.
Regardless, Whelan anticipated the state would have a budget by the constitutionally required June 30, the end of the fiscal year.
A 2006 budget impasse led to the unprecedented closing of Atlantic City’s casinos, although subsequent changes to state law have made that outcome far less likely.
“It’s an embarrassment to even talk about it,” Whelan said of the casino shutdown. “It’s not going to happen.”
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