Governor Chris Christie's latest assessment of the damage done by super-storm Sandy puts the recovery price tag at almost $37 billion. Still, the Governor thinks New Jersey can afford a tax cut for the middle class.

Governor's Office/Tim Larsen

Christie says his administration will work from day-to-day on damage assessment and its impact on the State Budget. He says everything is still very new so he doesn't have a clear idea what it will mean for revenue collections.

"I've heard some people talking concerns for the middle class in this state and I share that concern and I think if they did they should have passed the middle class tax which is what we wanted to do and what I still want to do," says Christie. The 'they" he's referring to is the Democrat-controlled legislature. "They seem to just like to talk about doing something for the middle class rather than actually cutting taxes for the middle class."

Asked to respond to that statement by the Governor, State Senate President Steve Sweeney doesn't mince words.

He says, "Well you know that's a lot of crap…..95% of the money from his (Christie's) tax cut was going to benefit the wealthiest 5% of people in the state. The tax cut he's talking about now is my tax cut which benefits the middle class and the working poor and seniors."

For months Democrats have said they would approve the tax cut if the state has the revenues to pay for it.

"We would find ways to accommodate that within the budget because nothing is more important to build our economy than to have our people have more money in their own pockets to be able to spend," says Christie. "I don't need more government programs to try to help the middle class. I need a tax cut to help the middle class."

Sweeney says, "Unfortunately you're seeing the situation the state's facing financially and he (Christie) can't ignore these numbers anymore. We're going to need not millions, but billions of dollars to rebuild this state and the good thing is that we were actually responsible and didn't promise anything. We paid attention to the revenues before the storm. They were off by hundreds of millions of dollars."

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 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.