- Associated Press - Monday, June 23, 2014

TRENTON, N.J. (AP) - Democratic New Jersey lawmakers are pushing their own budget plan that would make full contributions to public employees’ pension funds and hike income taxes on payers earning at least $1 million.

Their budget, which Assemblyman John Burzichelli said would be introduced to the Assembly’s budget committee Tuesday, is a direct response to Republican Gov. Chris Christie’s plan, which includes slashing the pension payment and not budging on income taxes.

At a news conference, Republican lawmakers bashed the Democrats’ ideas and called for a constitutional amendment to give lawmakers the ability to rein in subsidies on local schools.

The plans are being bandied about as lawmakers aim to adopt a balanced budget by next Monday so one can take effect the next day, the start of a new fiscal year, without a government shutdown. But for all the debate, not much is in doubt about how the process will play out.

Democrats most likely will adopt a budget they find palatable, then Christie will use his line-item veto power to turn it into one that he favors. And without the support of some legislative Republicans, any effort to override the line veto would fail.

The state realized only in April that its revenues for the current year were missing the mark; it then lowered its projections for fiscal 2015. Over the two years, the projected gap totals $2.75 billion.

Christie wants to fill the gap mostly by cutting pension payments, which are rising rapidly under a 2010 deal to make up for decades of underfunding over a seven-year span. He has used his executive power to reduce the payment due this month.

Amid the budget debate, a judge in Trenton is considering a lawsuit from unions for public workers who say Christie should not have cut the pension payment. In a court filing Monday, they asserted the current budget has unspent funds that could go toward pensions. A hearing on that matter is scheduled for Wednesday.

Democrats say the state should honor its obligation to public workers. Burzichelli said Democratic leaders in the Assembly and in the Senate have agreed that to meet that obligation lawmakers should increase income taxes on people with incomes over $1 million. The top rate would be 10.75 percent instead of the current 8.97 percent. Democrats say that would net $667 million. They also propose a one-year hike in the corporate business tax.

The Democrats also want to eliminate dozens of expanded taxes and fees Christie proposed, including a new tax on e-cigarettes. Many Republican lawmakers also oppose those expanded taxes.

But under the Democrats’ plan, the state would begin imposing sales taxes on online retailers for sales in New Jersey whether or not the stores have operations in the state. Democrats also want to increase state funding in several areas, including nursing homes.

Also Monday, 23 Assembly Republicans held a news conference to decry Democrats’ proposal to increase income taxes on anyone. Assemblyman Jon Bramnick said the state could control spending with a constitutional amendment that would keep courts out of school spending.

In a decades-long string of decisions, New Jersey’s top court has dictated higher state subsidies for 31 low-income school districts. Bramnick and his colleagues say the system is unfair and does not produce a quality education. They say the state could fund more of its priorities by reworking how it contributes to school districts and by reducing payments to the most heavily subsidized schools.

___

Follow Mulvihill at http://www.twitter.com/geoffmulvihill

LOAD COMMENTS ()

 

Click to Read More

Click to Hide