Tax Cut Debate Starts Again In Post-Sandy NJ [AUDIO]
Before superstorm Sandy slammed New Jersey and plunged millions in to darkness, Governor Chris Christie was consistently berating the Democrat-controlled legislature for not passing a tax cut bill.
Democrats said they wanted to wait to make sure the state had the revenue to afford a cut. Sandy and the subsequent nor’easter put tax cut talks on hold, but not for long.
Asked what the cost of clean-up and recovery will mean for his tax cut plans, Governor Christie says, “(I) don’t know. I mean I still have to work with the (State) Treasurer on that. I mean, I think it’s hard yet for us to tell.”
Christie says there are two ways to look at New Jersey’s revenues in the aftermath of Sandy. He’s sure that in the short term the State has experienced a diminution of revenues because people who have lost their jobs are not paying income taxes. Less people have been buying things at stores, so the sales tax has likely taken a hit as well. Businesses have not been making profits therefore the corporate business tax might lag too.
On the other hand says the Governor, the state is about to go through, “an enormous rebuilding.”
He says no one anticipated the rebuilding and no one wants it to have come under these circumstances, but the rebuilding will require the purchase of supplies, the hiring of workers and businesses will have an opportunity to make more money than maybe they would have otherwise made.
“In the context of a tax cut,” explains Christie. “My view is; before the disaster we had plenty of room to do a tax cut and that we should because it would be stimulative to the economy……I think we should have done it already. If we had people would have that money in their pockets right now and be able to spend it and it would help the economy as well, but the legislature chose not to do it.”
“I don’t think we should even be talking about a tax cut at this point in time,” says Assembly Budget Committee chairman Vinnie Prieto. “I think it’s prudent for us to wait and see and I think this (Sandy) just shows that you never know what may occur…I think our ‘wait and see’ approach was the right approach because you never know what’s coming down the pike.”
Christie originally proposed to reduce personal income tax rates, across-the-board, for every New Jerseyan, by 10% with the three-year phase-in of the cut with the current year’s budget. He said 10% tax cut for every working New Jerseyan would help families to keep more of what they earn and make the state more competitive with other states and attract more new jobs to New Jersey.
The Senate Democrats’ proposal spearheaded by Senate President Steve Sweeney 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 10% of the first $10,000 in property taxes paid. In the spring, Sweeney and Christie appeared ready to announce an agreement with a $400,000 threshold. A press conference was scrapped after sources said several Senate Democrats were not sold on the compromise.
The Assembly Democrats’ property tax cut plan works the same way as the Senate’s proposal, but would provide a 20% savings and be partially funded by a millionaires tax increase. Seniors would receive a 25% property tax cut under the proposal.