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The Selling of an Income Tax Cut

Credit: Governor's Office/Tim Larsen

For Gov. Chris Christie, the politics of the budget is both an inside game and an outside game, one played inside the Beltway in Trenton and inside the TV studios that reach outside to the national audiences that keep Christie's name at the top of the once and future presidential and vice-presidential preference polls.

And yesterday, one day after a budget speech that echoed with a triumphant Reaganesque "Morning in America" optimism, Christie was hard at work in both political arenas.

Christie's ability to command the national media stage almost like a presidential candidate -- unprecedented for a New Jersey governor -- is a source of frustration for Democratic legislative leaders. Asked a question about Christie's intentions at the Democratic press conference following the budget speech, Assembly Speaker Sheila Oliver (D-Essex) quipped, "We'll just have to watch Piers Morgan on CNN tonight to find out."

Christie had taped the CNN prime-time interview show in Trenton the Friday before the budget speech, but the principal issue in the New Jersey budget debate -- whether Christie's income tax cut favors the wealthy and, therefore, whether Democrats are right to demand that he cut property taxes instead -- has been in the public forum since Christie first proposed the 10 percent across-the-board income tax cut during his State of the State speech last month.

Christie got off his best shot not when asked about New Jersey millionaires, but about whether Warren Buffet was right to argue that the rich should pay higher income taxes.

"Well, he should just write a check and shut up, really, and just contribute," Christie shot back "The fact of the matter is, I'm tired of hearing about it. If he wants to give the government more money, he's got the ability to write a check, go ahead and write it."

Christie's Warren Buffett remarks quickly made it to YouTube, and he got a further bounce when the White House responded.

Christie followed up his budget speech and Piers Morgan spot with a live appearance yesterday on ABC's "Good Morning America" with George Stephanopoulos. It was yet another opportunity to reach a broad in-state and national audience in a friendly interview environment with a national host sophisticated about the subtleties of national politics and policy, but not as concerned with the fine points of New Jersey budget politics.

Christie went from Good Morning America's millions of viewers to one of his favorite venues, a town hall meeting, this time in Palisades Park, that would be packed largely with supporters -- but one where he would automatically command coverage from New Jersey's newspapers, radio stations, and TV networks for his message.

Once again, Christie made his case for his income tax cut, arguing that it was fair because all taxpayers would get the same percentage cut in their tax bills -- even if that meant that a family making $50,000 would get only $80, while a millionaire would get back more than $7,000. He conceded that one reason he decided to cut income taxes was because the amount of money he had available for tax cuts wouldn't make a dent in the $25 billion collected each year in property taxes. "The 183 million [first year income tax cut] is a fraction of what they need to get any significant relief in property taxes," Christie said.

Despite his media advantages, Christie is currently losing his fight for a 10 percent income tax cut in the court of New Jersey public opinion. More than 70 percent of New Jerseyans routinely tell pollsters they would rather see Christie and the Democratic-controlled legislature cut property taxes than income taxes. And the narrow majority of 52 percent who said they were in favor of an income tax cut in a recent poll favored it because they thought the average income tax cut would be about $750 -- five times as much as a family making $100,000 would actually receive.

Christie is banking his budget and his income tax cut on state tax revenues coming in on schedule this year, followed by a 7.5 percent revenue increase next year. However, yesterday's January revenue report did nothing to boost confidence. Income tax revenues for the first seven months of Fiscal Year 2012 were running just 2.3 percent ahead of last year, and Christie needs that increase to jump to 4.9 percent increase by June 30, when the fiscal year ends. But Christie knows that disputes over revenues are for budget chairmen and fiscal policy wonks because the governor has the unilateral authority to certify the final revenue numbers in June.

Christie realizes that achieving the income tax cut he has made the signature issue of his third year in office -- a year in which he is expected to play a high-profile role at the Republican National Convention in Tampa, where he could emerge as a vice presidential nominee or even a compromise presidential candidate in a deadlocked convention -- will come down to the ultimate inside game.

Christie can count on the unanimous support of the 16 Republicans in the 40-member Senate and the 33 GOP loyalists in the 80-member Assembly to vote for his income tax cut, but he will need the votes of at least five Democratic senators and eight Democratic Assembly members to pass his income tax cut.

For the Republican governor, it is a familiar scenario.

He needed the same number of Democratic votes to pass his first budget with the painful school aid and property tax rebate cuts.

He needed the same number of Democratic votes to pass legislation requiring teachers, police, firefighters and other government employees to pay more toward their pensions and health care benefits and to give up their right to negotiate health care issues at the bargaining table.

And he needed the same number of Democratic votes to pass a series of business tax cuts that were the centerpiece of his second budget.

In every case, those Democratic votes, which helped make him the darling of the Republican Party, came with few apparent strings attached, and they came each time from the same faction of the Democratic Party -- the party organizations led by George Norcross, the Democratic powerbroker whose power base in eight South Jersey counties stretches from the Delaware River to the Atlantic Ocean, and Joseph DiVincenzo, the Essex County Executive whose staff includes two senators and the Assembly speaker.

Christie knows he will need to reach another accommodation with Norcross and DiVincenzo if he hopes to pass his income tax cut.

DiVincenzo was spotted by Star-Ledger columnist Tom Moran standing and applauding with Republican legislators when Christie made the case for the income tax cut during his budget speech Tuesday

Meanwhile, Christie and Norcross have found common ground in recent months on the recommendations made by a blue-ribbon commission to allow Rowan University and its new Cooper Medical School, which the wealthy Norcross launched and endowed, to absorb Rutgers-University's Camden campus as part of a reorganization of the state's research universities.

While Rutgers and other universities averaged a 5.58 percent increase in the budget that Christie unveiled Tuesday, Rowan received 12.8 percent increase that pushed its aid to $90 million from $79.8 million the year before -- the third highest aid amount after the two research universities, Rutgers and the University of Medicine and Dentistry of New Jersey.

Yesterday, Christie seized upon a question about Norcross' influence posed at the Palisades Park town meeting to send an approving message 100 miles down the Turnpike to South Jersey.

“Most of the time we spend talking education issues in Camden,” Christie said of Norcross. "He’s concerned about benefits in Camden; he has made a significant philanthropic investment in Camden and wants to see it succeed. He has influence What that means is if he calls I return his call. If he has an idea I listen. He’s an important person in the business and philanthropic community.”

As PolitickerNJ reported, Christie seized upon the opportunity to try to drive the wedge between Norcross and former Democratic Governor Richard J. Codey (D-Essex) a little deeper -- and to draw himself closer to Norcross and DiVincenzo publicly.

“They’ve not been supporters of each other,” said Christie. “Senator Codey takes every opportunity he can to say bad things about George Norcross, me, and Joe DiVincenzo."

Christie noted that he and Norcross do not always agree, and Norcross said in a recent interview with Gannett that he favored a constitutional convention to reform New Jersey's tax structure.

At their press conference following Christie's budget speech, the Democratic legislative leadership -- which includes Senate President Stephen Sweeney (D-Gloucester) and Assembly Majority Leader Louis Greenwald (D-Camden) from Norcross' camp and Speaker Oliver, a DiVincenzo protege -- insisted that Democrats would stand united against Christie's income tax cut and propose their own property tax cut as an alternative. Christie's hope is to chip away at that unity, and if he does, it will be Christie's inside game -- not his appearances on "Morning Joe" and "Good Morning America" -- that will prove decisive in the governor once again getting his way.

Mark J. Magyar is an editor-at-large for NJ Spotlight.

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