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Christie Says He Still Holds Out Hope for Budget Deal with Democrats

But governor hints during monthly radio show that he would once again veto ‘millionaire’s tax’ to help deal with pension shortfall

christie-radio
Credit: NJ 101.5
Gov. Chris Christie answers questions during his weekly radio show.

Gov. Chris Christie says that this year he’s looking to negotiate a budget deal with lawmakers – possibly managing to avoid a repeat of last year’s messy budget season.

“The fact is that we have until June 30 to pass a budget and I’m confident we’ll do that,” Christie said last night during his monthly radio show on NJ 101.5 FM.

Despite that confidence, the Republican governor and Democratic legislative leaders have a lot of work to do, given that they’re far apart right now on the size of a planned contribution into the public-employee pension system and how to pay for it.

Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Vince Prieto (D-Hudson) have both talked openly this year about increasing the income tax rate on earnings over $1 million to bring in more revenue for a pension payment, something Christie has rejected on four different occasions since taking office in early 2010 and which he hinted he might do again.

“Listen, I’m not going to get into specifics of what they may or may not do,” Christie said last night. “If they choose to push a budget on their own, that’s their responsibility if they choose to do it that way.”

Last year, the Republican governor went against the wishes of the Democratic legislative leaders and significantly reduced a promised payment into the pension system when he used line-item veto powers to cut the $34 billion spending plan Democrats sent him at the end of June.

But in doing so, Christie spurred a lawsuit from public-worker unions, which accused him of breaking a state law calling for the bigger contribution -- $2.25 billion compared to $681 million – and drew the attention of Wall Street credit-rating agencies, which later downgraded New Jersey’s credit ratings, primarily citing concerns about pension funding.

Those events all ran counter to statements Christie’s made as he explores running for president in 2016, including his claims that he works well with Democrats and that his handling of the pension system has been a marked improvement over predecessors who chronically underfunded the state’s numerous pension funds.

This year, then, it’s not surprising that Christie is indicating that he would prefer to negotiate a budget deal with legislative leaders and reach an agreement well before the new fiscal year begins on July 1.

Pension-reform laws Christie signed in 2010 and 2011 guaranteed a payment of $3.1 billion, an amount the legislative leaders want to see the governor come close to funding. But Christie has said that amount is now unaffordable, and his $33.8 billion spending plan] for the 2016 fiscal year calls for a $1.3 billion contribution.

Last night, radio-show host Eric Scott tried to press Christie on what he would do if Democrats, as they did last year send him a proposal to increase taxes on earnings over $1 million – what’s often referred to as a millionaire’s tax – if the additional revenue were used only to boost the pension contribution.

That’s the course New Jersey voters want their leaders to take this year, according to a poll released last week by Quinnipiac University.

Asked specifically whether they approve of increasing taxes on those earning over $1 million to help cover the pension contribution, 64 percent of the voters surveyed said they would support doing so, compared to 33 percent who said they wouldn’t.

Christie seemed to indicate last night that he’s readying another veto, but didn’t come right out and say so.

“I’ve vetoed a millionaire’s tax four times, so sometimes past is prologue, but we’ll see what happens,” Christie said. “I’m not going to negotiate in public on the budget.”

Neither Sweeney nor Prieto could be reached for comment last night.

If the three men do reach an agreement on a spending plan this year it would mark the third time that Democrats have been able to work with the governor on a consensus budget since he took office in early 2010. It’s something they accomplished during Christie’s first year in office and again in 2013, when Christie was up for re-election and all 120 legislative seats were also on the November ballot.

But there was no budget deal in 2011, 2012 or last year. That resulted in the budget being signed into law only after Christie exercised gubernatorial line-item veto authority, which enables him to delete language and spending from the budget, but not make any additions.

Christie’s decision to veto a millionaire’s tax hike and an associated surcharge on corporate revenue that Democrats proposed last year to help fund the larger, $2.25 billion pension contribution resulted in enactment of the current $32.8 billion budget.

Depending on how the pension litigation plays out, the governor and lawmakers may ultimately be forced to make the larger payment before the current fiscal year ends on June 30. The unions won the first round of the case in state Superior Court in February, but Christie’s administration has appealed to the state Supreme Court. Oral arguments are scheduled for May 6.

The court has also agreed to allow Sweeney and Prieto – who have sided with the unions – to join the case as a “friend of the court,” accepting a brief yesterday that they filed last week against the governor’s wishes.

Christie has also proposed a new round of public-employee benefits changes, including freezing the current pension system in favor of a new retirement plan with features of a 401(k). But last week officials from the New Jersey Education Association pulled out of talks with a panel of experts Christie appointed last year to review the affordability of employee benefits, striking a blow to his hopes for new reforms.

He acknowledged during the radio show last night that there’s been “no progress” when it comes to his broader reform plan, which also includes a proposal to offer employees less-generous healthcare coverage.

“The fact is that they never got anywhere near coming to any final negotiations on this,” Christie said.

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