Is A New Jersey Government Shutdown Possible? [AUDIO]
As per the State Constitution, New Jersey must have a signed and balanced budget in place by midnight June 30.
Today is June 18 and Governor Chris Christie and the Democrat-controlled legislature still appear to be miles apart on an agreement. Key players insist state government will not shutdown as it did in 2006.
"On the 25th (of June) we will vote out a budget," says State Senate Budget Committee chairman Paul Sarlo. "There will not be a government shutdown, not from the legislature's perspective…We have an obligation to get a budget done by June 30th. We're going to meet that obligation a couple of days in advance."
Assembly Budget Committee chairman Vinnie Prieto agrees with Sarlo. He says, "Nobody wants a shutdown because that's not good for the people of New Jersey and we've seen that already."
Questions remain. There is still no consensus on three competing tax cut plans in Trenton and now, Democrats are also committed to passing a millionaires tax increase for the third time in three years. Christie has vetoed that tax hike twice and promises to do it again this year.
"We want to cut your taxes this year and we want you to get a 10 percent credit on your income tax towards your property taxes," said Christie recently. "That's what the Senate President's plan is. I've wanted to cut taxes across the board for the income tax. There's an area for us to compromise there I suspect and you know the senate President and I have compromised on a lot of things over the last two and a half years."
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 this budget. He says 10% tax cut for every working New Jerseyan will 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. Recently 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.
Assembly Democratic Leader Lou Greenwald says his fellow Party members in the Assembly and State Senate want to put $183 million in a property tax relief fund to help pay for a still-to-be-determined tax cut at a still-to-be-determined date only if State revenue collections match Christie's projections.
Christie accuses Democrats of, "Dithering right now about whether to cut taxes for the people of New Jersey. It's simply wrong…The fact is; they don't want to cut taxes because they only know how to raise taxes."
The Governor says if Democrats admit the 'New Jersey Comeback' is real they would also have to concede that their policies were wrong and his were right. He says, "This is a very difficult pill for Democrats to swallow, but it's time for them to begin swallowing. The fact is; it is time for a tax cut in this state. It is long overdue for a tax cut in this state…We choose to demand tax relief instead of tax increases and gimmicks and games meant for political purposes."
Even if Christie vetoes the millionaires tax increase as promised it would be a separate bill and a part of the budget bill he would have to sign.
In 2006 state government shutdown for a week as then-Governor Jon Corzine and Democrats in the legislature battled over a 1% increase is the sales tax.