Lawmakers Approve Tax Hikes in Budget to Make Full Pension Payment

June 23, 2015 | Politics
Plan has a millionaires tax and corporate tax surcharge to make full pension payment.

By Michael Aron
Chief Political Correspondent

Strict partisan lines were drawn today as the Assembly Budget Committee approved several tax hikes in order to make a full pension payment.

Republicans said hiking the millionaires tax and slapping a 15 percent surcharge on the corporate business tax will kill jobs.

Democrats said they aren’t happy about raising taxes, but that state government made a commitment to public workers four years ago.

“There was a bipartisan agreement to do X. We haven’t done X. So now we’re at a point where we have to figure out how do we make the payment on an agreement that was struck by many of the men and women of our Legislature, many who sit at this very table,” said Assemblyman Troy Singleton.

“Every time there’s a hard choice to be made in this state, the majority party just raises taxes and they call that a hard choice,” said Assemblyman Jay Webber.

Business lobbyists warned that hiking taxes on those who create jobs will make New Jersey less competitive than neighboring states.

“I don’t have to tell any of you that competition is fierce. I live in South Jersey and see commercials for New York, and they are chomping at the bit trying to steal away our businesses,” said New Jersey Chamber of Commerce Senior Vice President of Government Relations Michael Egenton.

Back in February, Gov. Chris Christie proposed a $33.8 billion budget with a pension contribution of $1.3 billion.

The Democrats yesterday announced they were putting forward a $35.3 billion budget with a full $3.1 billion pension payment.

“We are sending a very clear message that obligations made are obligations that have to be kept,” said Assemblyman John Burzichelli.

“You can tax everybody as much as you want but I’ll tell you right now it’s not a $3 billion problem. I think we have to start being honest. It’s an $82 billion problem,” said Assemblyman Christopher J. Brown.

Republicans want to revise the pension system to make it less expensive.

Democrats ignore that and press ahead.

“It’s easy to say no new taxes. I don’t want another tax increase, and I say that frankly and candidly. But how does one pay for the bills?” asked Assemblyman Gary Schaer.

Republicans say Democrats, knowing that Christie will veto the tax hikes and additional pension payment, are simply posturing.

“The majority knows very well this is not gonna become law, that the governor will veto this bill as soon as it hits his desk. It is passed for political reasons apparently,” Webber said.

“The only good thing about this bill is that it’ll be dead on arrival on the governor’s desk,” said Assemblyman Anthony Bucco.

The Assembly committee vote was 8 to 4 along party lines.

Two hours later, the Senate Budget Committee repeated the exercise, approving the budget and related tax hikes 8 to 5.

On Thursday, both houses will vote on the budget and the tax bills. Then comes the anticipated veto and perhaps another failed attempt at a veto override.