Bloomberg News

New Jersey Tax Cut Will Be Passed Before July, Christie Predicts

March 09, 2012

New Jersey Governor Chris Christie, the Republican whose state has the nation’s highest taxes, predicted he and Democrats who control the Legislature will work out lower levies before July 1.

Christie, who’s midway through his first term, is calling for a 10 percent income-tax cut over 36 months, which he’s said is possible now that the state’s “fiscal house is in order.”

“We’ll bring them along,” Christie said yesterday of legislative Democrats. His remarks at a town-hall meeting in Florence were punctuated by a shouting match with a man opposed to the merger of Rutgers University law school with Rowan University. The man, who identified himself as William Brown, a 34-year-old Rutgers law student, was ejected by police.

New Jersey led the U.S. in combined state and local tax burden in 2009, according to the Washington-based Tax Foundation. The state also has the highest property-tax bills, an average $7,759 in 2011.

In a radio interview, Senate President Steve Sweeney, 52, a West Deptford Democrat, said Christie’s projection of 7.3 percent revenue growth, the underpinning of the governor’s proposed spending plan for 2013, is unrealistic.

“I’m not accepting the revenue projections,” Sweeney said yesterday on the “David Paterson Show,” hosted by the former New York governor on WOR AM. “My plan’s based on a 5 percent increase, which is more realistic.”

Sweeney has called for giving middle-income residents a 10 percent property-tax credit on their tax returns. Assembly Democrats propose doubling the credit to 20 percent.

‘Pretty Close’

A day earlier, Christie, 49, said he and Sweeney were “pretty close” on a tax-cut plan. He also dismissed the Assembly Democrats’ proposal as “dead.”

New Jersey’s revenue collections jumped 20 percent last month, narrowing the state’s shortfall from budget projections.

February revenue was 9.5 percent above forecasts, Treasurer Andrew Sidamon-Eristoff said yesterday in a statement. For the first eight months of this fiscal year, collections were up 4.3 percent from the same period of 2011, and are running 1.7 percent below projections.

Christie on Feb. 21 introduced a $32.1 billion spending plan for the fiscal year that starts July 1. The plan counts on the biggest revenue increase since before the recession began in December 2007.

New Jersey must have a budget in place by July 1.

The governor’s proposal is structurally unbalanced because it is built on “optimistic” economic-growth projections, Standard & Poor’s said in a Feb. 24 report. The budget also depends on using $288 million of reserves and increases the state’s reliance on one-time revenue to $1.6 billion, S&P said.

To contact the reporters on this story: Terrence Dopp in Florence, New Jersey at tdopp@bloomberg.net; Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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