TRENTON — Democrats in the New Jersey Legislature have handed Gov. Chris Christie a $32 billion budget that sets up a partisan showdown over the 10 percent tax cut the governor wants.
The Democrats’ budget sets money aside for a modest tax break for residents, but tethers the cut to ambitious revenue collections through the end of the year.
The budget that arrived on Christie’s desk Monday night is $400 million less than the one he proposed in February. But the governor is now brow-beating Democrats for failing to commit to phasing in the cut starting in January, and he is threatening to veto spending for programs and services Democrats care about.
“I’m going to point out to every living, breathing New Jerseyan I can find that these folks lied to you, they lied to me, and I am going to kick their rear ends from one end of the state to another until we get a tax cut,” Christie told a town hall audience in Brick on Tuesday.
Democrats have adopted a wait-and-see approach to determine whether the state can afford the cut. Revenue collections have been disappointing through the fiscal year that’s about to end, they reasoned, and the administration’s tax collection target for the 12 months starting July 1 is more optimistic than other governors’.
The Legislature’s own budget expert says the target is too generous. David Rosen of the Office of Legislative Services said New Jersey could easily find itself more than $1 billion shy of projections by the time the next fiscal year ends in June 2013.
Christie also criticized Sen. Paul Sarlo for telling residents he’ll decide when they get a tax break. Sarlo didn’t immediately return a message for comment.
Christie stands by his administration’s revenue projections and says the money is available to cut taxes. Democrats say Christie, a star within his party, is intent on taking a tax cut victory to the Republican National Convention in Tampa, Fla., in August.
“His irresponsible demand for an immediate implementation of a plan that won’t take effect for another six months appears to be motivated by his desire to sell a political tale to a national Republican audience, even if it puts New Jersey’s finances at risk,” said Sen. Loretta Weinberg, the Senate Democratic leader.
Christie gets final say over the budget and has threatened to slash spending important to Democrats — unless they relent on the tax cut. Democratic budget add-ons, such as $7 million for women’s health centers, $50 million to increase a tax credit for the working poor, and $25 million in nursing home aid, could be the first items to be vetoed.
The governor has till the end of the week to act. A balanced budget must be in place by July 1, the start of the new fiscal year, or government technically runs out of money and nonessential services would shut down.
The governor has line-item veto power over the budget, and he has shown a willingness to use it. He took a red pen to the budget the Democrats sent him last year, eliminating nearly $1 billion in spending before signing the document into law. He later made some budget restorations.
Though Christie has painted Democrats as taxers and spenders, the majority party says it has responded to ongoing economic challenges facing the state. Unemployment is 9.2 percent, a full percentage higher than the national average, and debt is among the highest of any state.
Assemblyman Gary Schaer of Passaic, vice chairman of the budget panel, defended the Democrat-led Legislature’s decision to defer the tax cut as fiscally responsible.
“If the total amount of tax relief proposed by the governor’s proposed income tax reduction for someone making $50,000 a year is a total of $80, I believe my constituents can wait to receive that $80,” he said before voting for the budget. “Under any circumstances, their lives won’t be changed by that $80. They can wait the six months to take out their wives or husbands for dinner.”
Republicans pointed to the irony in the Democrats’ argument: Sen. Kevin O’Toole of Wayne said Democrats questioned the legitimacy of the governor’s projections, but built their budget using the same optimistic revenue growth figures. The budget passed along partisan lines in both houses.
“They will say they’re being fiscally responsible by not giving you back more of your money now,” Christie told a recent town hall audience in Hunterdon County.
Democrats are advancing separate legislation that would increase taxes on millionaires and use the extra $789 million in revenue to restore property tax relief for homeowners earning less than $100,000, disabled residents and the elderly.
Christie has vetoed the tax hike twice before and has promised to do so again. It would raise the income tax rate nearly 2 points, to 10.75 percent, for 16,000 wealthy filers.
If he vetoes it again as expected, Democrats are likely to say the governor blocked property tax relief. He is likely to respond by saying he stopped an $800 million tax increase.