Bloomberg News

Christie Uses Powers to Order N.J. Lawmakers Back to Work

July 01, 2012

New Jersey Governor Chris Christie

New Jersey Governor Chris Christie’s 7.3 percent anticipated revenue growth is the biggest of any U.S. governor and the most since before the 18-month recession began in December 2007. Photographer: Peter Foley/Bloomberg

New Jersey Governor Chris Christie said he will use all the powers of his office, including ordering the Legislature back into session tomorrow, to get Democrats to approve a tax cut.

The first-term Republican said he will force lawmakers to return to Trenton, where he will address a joint meeting of the Senate and Assembly. He called the special session yesterday, a day after he signed a $31.7 billion budget for the fiscal year that begins today. The plan erased $361 million in spending initiatives added by Democrats, who control the Legislature.

Democrats sent Christie a budget on June 25 that swapped his proposed 10 percent income-tax cut for a property-tax credit, and delayed it until midway through the fiscal year to see if revenue meets his targets. The governor, 49, said Democrats’ plan held “tax relief hostage” and called the Senate budget committee chairman an “arrogant S.O.B.”

“As governor you have two bits of leverage: whatever power or authority in the office you have and the bully pulpit,” Christie said in a June 29 interview in his office. “I’m going to use both of them to try and get that tax cut.”

The budget Christie proposed in February predicted revenue growth of 7.2 percent, the second-most rosy projection after California, according to the National Governors Association. Standard & Poor’s in February called New Jersey’s plan unbalanced and dependent on “optimistic” economic forecasts.

Summer Break

State Treasurer Andrew Sidamon-Eristoff, a Christie appointee, has since said revenue through June 2013 may be $700 million less than Christie’s target, while the Legislature’s chief budget analyst has said the gap may be almost twice that.

Lawmakers typically recess in July and August. New Jersey’s constitution allows governors to bring them back into session “whenever in his opinion the public interest shall require.” While Christie may convene the session, Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver, both Democrats, control the agenda, under state law.

Christie, during the Statehouse interview, said he will travel to “every corner of this state” in the coming months to prod Democrats into releasing $183 million set aside in the budget for tax credits.

“I only hope we come within a few points of hitting these targets,” Senate Budget Committee Chairman Paul Sarlo, a Democrat from Wood-Ridge, said of Christie’s revenue projections in a June 29 statement. “If we don’t, we will need to come back and make painful cuts.”

‘More Theater’

Sarlo didn’t return a telephone call yesterday for comment on Christie’s special session. Senator Loretta Weinberg, a Democrat from Teaneck, said party members are talking and she doesn’t know what the strategy will be. She called the governor’s move “more theater for Christie.”

“What’s he going to do?” she said in a telephone interview. “Lecture us?”

Christie, in his statement yesterday, said he sent a letter to Sweeney and Oliver notifying them of the session.

“The budget, which contained billions of dollars in spending, failed to address the single issue that strikes at the heart of our shared interests, and our continued prosperity,” Christie said in the letter. “Lowering the tax burden on every New Jersey resident is a matter of unique and critical interest that demands our immediate and full attention.”

Tax Credits

The Democrats stuck with Christie’s revenue and spending levels in their budget, while placing conditions on the awarding of tax cuts.

“We presented the governor with a budget committed to providing middle class property tax relief, and regardless of the governor’s political theatre, no tax breaks will even go into effect until 2013,” Sweeney said in a statement yesterday. “While the last thing anyone wants in the middle of a heat wave is hot air coming from Trenton, we will be there.”

Christie signed the Democrats’ plan after vetoing items ranging from tax credits for the working poor to technology grants for private schools.

“This was not the kind of necessary spending we needed, and I also wouldn’t recognize or certify some of the revenues they put in because they were just complete fiction,” he said in the interview, highlighting examples such as $10 million in Medicaid fraud that Democrats counted on. “They just made up the numbers they needed to get to and we were not going to certify that kind of stuff.”

Rainy Day

Funds for the Democrats’ spending add-ons will be put into reserve as a result of the vetoes. That will increase the surplus to more than $600 million, almost double what Christie proposed in January. That’s enough to support any tax cut and provide a cushion in the event of a downturn, he said.

The governor, though, said in the interview that he’s sure his “New Jersey Comeback” has begun, citing the addition of 17,600 jobs in May, the biggest gain in seven years.

The budget Christie signed maintains $347 million in business tax-cuts, a near-record $1.03 billion pension payment and $8.87 billion in funding for public schools, the highest level in state history, he said.

Christie said he won’t sign Democratic legislation to increase the tax rate on income of $1 million or more. He said he hasn’t decided whether to strike down the bill or use a “conditional veto” to rewrite it and send it back to lawmakers as a tax cut.

To contact the reporter on this story: Terrence Dopp in Trenton at tdopp@bloomberg.net

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


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus