- Associated Press - Thursday, May 7, 2015

TRENTON, N.J. (AP) - Senate President Steve Sweeney introduced a bill Thursday to raise taxes on residents earning more than $1 million, the latest in a back-and-forth over the budget and public pensions between Democrats and Republican Gov. Chris Christie.

The Democrat-led Legislature introduced a similar proposal last year to help meet the state’s public pension obligations that failed to become law. He’s already said he would veto income tax hikes if they reach his desk this year.

Sweeney’s proposal is part of a bigger fight between Democrats and Christie over how much the state should pay into the pension fund, which has emerged as a key issue in this year’s budget negotiations.

Sweeney and Democrats say Christie should pay the nearly $3 billion called for in a 2011 law, but have not said how to make the payment. This proposal is part of an effort to close the gap.

“No one likes to increase any tax, and it would not be necessary to do so if New Jersey did not rank near the bottom in economic, revenue and job growth under the Christie administration,” Sweeney said.

Christie addressed the tax last month, saying he’s glad Democrats say they want to raise taxes since the effort could cost them politically.

Christie says the public pension system is broken and he’s proposing a $1.3 billion payment for fiscal 2016 as part of his $33.8 billion budget proposal.

That measure comes before lawmakers as he and public sector unions argue before the state Supreme Court over the fiscal 2015 payment of about $1.6 billion, which a lower court judge ruled Christie and lawmakers must make.

Sweeney on Thursday also called for increasing the state’s earned income tax credit, which usually helps lower-income residents.

Under the tax bill, the rate on income over $1 million would jump from 8.97 percent to 10.75 percent through 2018 and would generate $675 million in fiscal 2016. The money could go toward pensions but is not dedicated to them under the legislation.

The earned income tax credit rate would rise to 25 percent of the federal credit, up from 20 percent.

That change would cost about $60 million a year.


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