Sweeney defends tax increases as NJ budget solution
State Senate President Steve Sweeney, appearing on New Jersey 101.5 FM this morning, defended the tax increases in the record state budget approved by Democratic majorities in both houses of the legislature last week.However, Sweeney, a key player in the ongoing state budget battle with Republican Gov. Chris Christie, said Democratic legislators will not be able to sustain that position once the governor follows through on his promise to veto the measures.
“We can’t override,” Sweeney said, acknowledging that Christie will be able to use his line item veto to eliminate the “millionaire” and business tax increases in the $31.4 billion budget.
Sweeney defended the Democrats’ support of tax hikes to insure full funding of the state employee pension fund, something Christie says the state cannot afford. He argued that the legislature has already exhausted spending cuts as an alternative.
“Our government’s much smaller than it’s been,” Sweeney said. “We are bare bones now. Right now there’s one person in DOT that does road permits now from Mercer County south. One.”
“We had an obligation to meet this pension payment. . . we had to make some decision. . . but we can’t walk away from our obligation,” he said.
A caller asked why state employees shouldn’t contribute more to their pension and health care benefits. “I’m the one that sponsored the legislation that made them contribute,” Sweeney said.
Noting that high income earners and business had already received tax cuts during the Christie administration, Sweeney said, “Where are the jobs?”
“All you guys can think of is how to pick our pockets,” another caller told Sweeney, suggesting that a new plan replace the existing pension plan for state employees.
“Government shorted this thing (the pension fund) for about 15 years. Government did that,” Sweeney said in response. “If you run it, administer it properly, pensions can work. . . if they’re funded properly. . . Our pension system wouldn’t be in this situation if we’d made the payments.”
Asked why “double-dipping,” the practice of retiring on a government pension and then taking another government job can’t be eliminated, Sweeney said, “I think there should be discussion on that.”
“We can shrink government and we should shrink government,” Sweeney said, agreeing with another caller. “It’s been my plan for years. It’s called ‘shared services.” He cited Gloucester County’s elimination of its own jail system as an example.
“It’s not only about the state government, it’s local government, too,” Sweeney said, pointing to New Jersey’s many layers of governmental units. He said wider adoption of shared services could reduce state spending on aid to local municipalities.
The New Jersey Legislature passed a $34.1 billion state budget last Thursday, the largest in the state’s history. The Democratic majorities in both houses supported the spending plan while Republicans voted against it.
The legislative budget includes two revenue-raisers Gov. Christie has vowed to veto:
- a tax increase on New Jersey residents earning over $1 million annually, which would expire after three years;
- a 15 percent surcharge on the Corporation Business Tax, which would expire after one year.
Democrats and Republicans are also at odds over Christie’s decision to reduce a scheduled $2.25 billion public employees’ pension fund payment in the next fiscal year to $681 million to avoid a budget shortfall. A union lawsuit challenging the governor’s plan was rejected by a Superior Court judge last week.