Democrats unveil 2016 budget including tax on millionaires
TRENTON (AP) — New Jersey Democratic lawmakers say they are introducing a $35.3 billion budget that includes a one-time surcharge on the corporate business tax and a hike on levies on income over $1 million as well as a full pension payment.
State Senate Budget Committee chairman Paul Sarlo briefed the press on the Democrats' plans on Monday. Sarlo says Assembly Democrats are on board as well.
He added the business tax would be a one-year 15 percent surcharge but declined to say more about how it would work.
Democrats have said for weeks they expected to raise some taxes to make the payment.
Christie is expected to use his line-item veto to cut out the surcharges, resulting in his $33.8 billion budget becoming law.
Here are the major differences between the Democrats' $35.3 billion budget and Republican Gov. Chris Christie's $33.8 billion proposal.
TAX ON MILLIONAIRES
The tax is expected raise about $700 million and -- unlike previous Democratic proposals -- this measure affects only income over the $1 million threshold. The proposal, which was unveiled earlier this year, calls for raising the rate from 8.97 percent to 10.75 percent for four years. Christie's budget does not include income tax increases.
CORPORATE BUSINESS TAX
Democrats are proposing a one-time 15 percent surcharge on the corporate business tax. This is expected to net New Jersey revenue of $435 million. The state's rate is now 9 percent.
The Legislature's revenue gurus say they now expect the state to haul in $425 million beyond what was expected in fiscal year 2016. That's on top of an additional $300 million in larger-than-expected revenues in the current fiscal year. Democrats are counting on this revenue to make up their budget. Christie is not.
Democrats are making a $3.1 billion payment into the public pension. That's the amount called for under a 2011 law. Christie is proposing a $1.3 billion payment, and was backed up recently by the state Supreme Court. It held that while workers have a right to their pension, Christie and the Legislature would have to work out the annual payment.
Senate Budget Committee Chairman Paul Sarlo says funding for Planned Parenthood would be added to the budget. Christie has previously vetoed Democratic attempts to restore the funding.
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