Revenue Shortfall Bolsters Millionaires Tax Hike Argument [AUDIO]
The latest state revenue figures which show collections for April are $230 million below what Governor Chris Christie’s administration had projected. Assembly democrats are pouncing on the bad news and saying it proves their call for a millionaires tax increases makes sense now more than ever.
Assembly Budget Committee chairman Vinnie Prieto says, “This is further confirmation that the Governor’s proposed budget for next year is based on shaky figures, at best. These latest numbers are not surprising given that the Office of Legislative Services had already warned us that revenue would be lower than projected. I can understand the Governor’s unwillingness to accept the projections of OLS, given that they’re predicting lower figures than his for next year as well. If he did accept them, it would upend a great deal of his proposed budget for next year and millionaires might not get another tax break.”
Christie wants to cut income taxes by 10% for every New Jerseyans. Assembly Democrats have a plan they say can provide a 20% property tax cut for those who need it most. The battle lines are clearly drawn for Christie and Assembly Majority Leader Lou Greenwald and neither man is backing down.
The Assembly Democrats proposal would provide a property tax relief credit through the gross income tax return, for all residential homeowners with incomes up to $250,000 in the amount of 20% of the first $10,000 in property taxes paid.
To pay for the new revenue needed for the middle-class and lower-income property tax relief under the Assembly Democrats’ plan, the state’s income tax rate for those earning more than $1 million would be increased beginning next fiscal year. The rate would go from 8.97 percent to 10.75 percent. This would impact about 16,000 out of about 2.6 million filers and raise $800 million at the plan’s full implementation in fiscal year 2016. And, that’s where the problem lies because Christie hasn’t been shy about his thoughts on that particular tax increase.
In his budget message, the Governor said, “We have eliminated the special surtax that for a time gave New Jersey the highest marginal tax rate in the nation – and I am proud to have twice vetoed the effort to re-introduce it. And just so there is no mistake in my intention: I will veto any tax increase again.”
“Not only does the Governor’s plan to shower $7,000 in tax break handouts to millionaires while giving crumbs to the middle-class, but it’s now becoming clear the Governor has built his plan on a shaky foundation,” says Greenwald. “New Jersey’s middle-class families need more than fuzzy math, a hope and a prayer. They need real property tax relief they can count on. By asking millionaires and billionaires to give up the tax breaks they have enjoyed during the past two years, the Assembly Democratic plan has a more fiscally responsible funding mechanism. As a result, our plan delivers real property tax relief to 95 percent of homeowners, not just a town hall slogan built on a house of cards.”
A press release from the Governor’s team is titled “A Case of Selective Memory.” It says, “While Assembly Democrats apparently want to play political games to defend their obsession with raising taxes it’s important for you all to remember that had they gotten their way last June the state of New Jersey would currently be facing a nearly $1 billion shortfall for the current fiscal year.”
The Office of Legislative Services projected far higher revenues just after the current budget was signed into law and Democrats want to increase spending based on this numbers.
Earlier this year, Christie said, “Well, what I’m really happy about is that we didn’t do what the Democrats wanted us to do. We would be in an even deeper hole. Thank God I line-item vetoed a billion dollars worth of spending or we would be looking to cut school aid right now, and these are the ramifications of their conduct.”