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Analysis: Millionaire’s Tax to Close Pension Gap Could Be Headed To Ballot in 2015

Including the millionaire’s tax in the budget bill proved to be a mistake, since Christie not only vetoed it but also used his line-item veto to punish Democrats by excising their top priorities from the budget -- a punitive exercise that famously led Sweeney to call Christie a “rotten prick.”

However, Christie would have no ability to block the Democratic-controlled Legislature from mustering the simple majority needed to pass legislation this year and again in 2015 placing a constitutional amendment authorizing a millionaire’s tax on the ballot for that November. (Democrats lack the three-fifths majority needed to put a constitutional amendment on the ballot in a single year.) Sweeney needs to mend his relationship with the state’s public employee unions heading into his expected 2017 candidacy for the Democratic nomination for governor, and passage of a constitutional amendment establishing a millionaire’s tax would free up needed funding for pension payments, whether the tax is specifically dedicated to that purpose or not.

Such a move would be even more popular with the public employee unions than mere passage of a millionaire’s tax as a political statement for Christie to veto.

Assembly Democratic leaders reportedly are less worried about coming up with a solution to the pension cuts than Sweeney, focusing their attention on more to ways to restore a $10 million reduction in cancer research funding and other smaller spending cuts in Christie’s proposed budget.

However, passage of legislation putting a constitutional amendment for a millionaire’s tax on the November 2015 ballot would be a popular move with Assembly Democrats because the entire Assembly is up for election that year.

A constitutional amendment authorizing a millionaire’s tax would not only be popular with Democratic rank-and-file voters, but would give public employee union leaders an additional reason to get current and retired teachers, police, firefighters, and state and local government employees out to vote in 2015.

And while unionized public employees and retirees were voting for the millionaire’s tax, they would be encouraged to vote for Assembly Democrats to send a message a Christie -- which would not only protect incumbent Democrats in tough swing districts like Bergen’s 38th, but also could help Democrats pick up a handful of seats in what is likely to be a low-turnout election.

It’s not a new idea: The 2013 constitutional amendment increasing the minimum wage was viewed as a politically advantageous maneuver to get lower-income voters to the polls in a year with the governor, Senate, and Assembly on the ballot. Such political calculations work in reverse as well: The reason New Jersey does not have sports betting is that the state’s GOP-controlled Legislature passed up a one-year window to approve sports betting in Atlantic City in 1993 for fear that the constitutional amendment would pull out a large urban vote that would hurt Republican Christine Todd Whitman’s chances of defeating incumbent Democratic Gov. Jim Florio.

Constitutional scholars have criticized the use of the constitutional amendment process simply to pass bills that would be otherwise be vetoed by the governor.

However, this is the first time in modern New Jersey history that one party will have controlled both houses of the Legislature for six years with the other party controlling the governorship -- and Christie has not only been more skilled in the use of the bully pulpit, but also more willing to exercise his veto power than any previous governor.

Consequently, frustrated Democratic legislative leaders are starting to look to the constitutional amendment process as a legislative form of “initiative and referendum.”

Ironically, it was Democratic legislators and the public employee unions who successfully blocked passage of Republican-sponsored legislation in the 1980s and 1990s to give citizens in New Jersey the same right to put laws on the ballot by petition and enact them by direct vote that voters in 27 other states have.

At the time, Democrats were worried about California’s passage of Proposition 13 in 1978 and Massachusetts’ passage of Proposition 2½ in 1980 limiting property tax increases, as well as the impact of unlimited special interest money in support of ballot initiatives in various states.

While labor and business interests spent several million dollars in 2013 for and against the constitutional amendment to raise the minimum wage, that spending was dwarfed by the tens of millions of dollars spent by independent expenditure committees in support of gubernatorial and legislative candidates that year.

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