NJ Senate leaders propose millionaire’s tax hike [POLL/AUDIO]
Not pleased with Gov. Chris Christie’s spending plan, the top two Democrats in the State Senate presented an alternative state budget Wednesday, which includes a tax increase for New Jersey’s wealthiest residents – something the governor has said he would not accept.
Senate President Steve Sweeney and Majority Leader Loretta Weinberg said the state can make its entire pension payment in the next fiscal year if Christie accepts their ideas.
“What I’m proposing is a budget that will meet all of our obligations going forward,” said Sweeney (D-West Deptford). “We’re proposing a millionaire’s tax. I say (to Christie), look four-and-a-half years of protecting this one class, this experiment that you had, didn’t work.”
The state’s highest income tax rate is 8.97 percent. Under the Sweeney/Weinberg plan the tax on those making $1 million dollars a year or more would rise to 10.75 percent and generate $565 million in new revenue. The new rate for those making between $500,000 and $1 million would be 10.25 percent and generate $155 million. Sweeney said he is willing to allow the tax hikes to sunset if more jobs are created and the state’s economy rebounds. He said he’s not worried that the wealthy will flee the state because its’ the middle class that truly is struggling.
“They’re the ones leaving. Rich people can afford to live here. God bless them. Let me tell you something; we’re not going leave anybody out here. We’re all in it together means we’re all in it together, not just some” Sweeney said.
On Townsquare Media’s June edition of Ask The Governor, Christie continued to insist there will be no tax increases on his watch.
“I am not going to raise taxes on the people of New Jersey to pay for a broken, bloated pension system and a Cadillac health care system,” the governor said.
The Senate Democrats’ budget plan would generate revenue through other means as well. The proposal also calls for a one-time tax adjustment ($105 million), a 15 percent Corporation Business Tax surcharge ($375 million), a Gross Income Tax Revenue Forecast adjustment ($69 million), a one-year suspension of Business Employment Incentive Program grants ($175 million) and an assumption of unspent funds in the Fiscal year 2015 budget ($125 million).
“I support our senate president in what I think is a realistic, appropriate budget that sets the right priorities for the residents of the state of New Jersey,” said Weinberg (D-Teaneck).
A flurry of press releases were emailed after Sweeney and Weinberg made their announcement. Union leaders and progressive Democratic groups said they support it while Republicans denounced the proposal and claimed it amounts to a $1.6 billion tax increase.
“The governor has been emphatic that he will not raise taxes on already overburdened New Jersey taxpayers suffering from one of the harshest tax structures of any state in the country. Raising taxes drives businesses and citizens out of New Jersey and makes our problems worse,” Christie spokesman Kevin Roberts said in an emailed statement Wednesday. “The sins of the past require very difficult but necessary choices — not new taxes that place New Jersey at a significant competitive disadvantage to neighboring states and does not deal with the root problem – out of control pension and benefit costs.”
On June 25, a New Jersey court will hear arguments in a lawsuit seeking to stop Gov. Chris Christie from slashing the current fiscal year’s pension payment. The state was supposed to contribute $1.6 billion, but Christie now plans to pay in $696 million. If the court rules against Christie it would knock this year’s budget out of balance and have the ripple effect of impacting the budget that begins July 1.