NJ Budget Battle Set to Begin [AUDIO]
Christie wants a tax cut in fiscal year 2015, which begins July 1, but New Jersey is on the hook for a huge pension fund payment, one that is far bigger than what was paid into the fund this year.
By law, New Jersey was required to pay $1.7 billion into the pension system this fiscal year. The same law forces the state to pay roughly $600 million more in FY ’15, which would bring the total to about $2.3 billion.
Will that added expenditure squeeze out the funds for a tax cut? Depends who you are asking, and who is answering.
“Revenue will dictate whether or not a tax cut is feasible, and at the six-month projection the revenues are still not strong enough,” said state Senate Budget Committee chairman Paul Sarlo (D-Wood-Ridge). “There’s not a person in the legislature who would not like to see a tax cut, including myself.”
The tax cut fight is nothing new. Christie had been calling for a 10 percent across-the-board income tax reduction. Sen. President Steve Sweeney (D-West Deptford) countered with an income tax cut tied to a resident’s property tax bill and the two seemed to have a compromise, but other Democrats in the legislature blocked the cut when they said the state couldn’t afford it.
“Whenever you can afford a tax cut, which I think we can, I think it’s really a stimulus for the economy,” said Senate Budget Committee member Kevin O’Toole (R-Wayne). “If we have a tax cut that helps grow the economy, I think it spurs on other activity, whether it’s construction or other jobs as well.”