New Jersey Treasurer Andrew Sidamon-Eristoff Tuesday told lawmakers that Gov. Chris Christie would not sign a fiscal 2012 budget that includes a tax hike on the state’s top earners.
Sidamon-Eristoff testified before the Assembly Budget Committee regarding Christie’s $29.4 billion fiscal 2012 budget proposal and the state’s overall financial health. Fiscal 2012 begins July 1.
The Republican governor’s budget relies on spending cuts and no tax increases to help bring expenditures in line with projected revenue collections.
The state may need to increase its school funding allocation after a judge last week determined that a $1.6 billion underfunding of schools is unconstitutional. New Jersey’s Supreme Court will weigh in on the issue.
Sidamon-Eristoff warned the panel that Christie would not support a budget plan that increases taxes on the wealthy even if the state were forced to increase the school-funding allocation.
Sen. Shirley Turner, D-Mercer, last month filed legislation that would raise to 10.75% from 8.97% the income tax on those earning $1 million or more. Turner is the sole sponsor of the measure. Democrats control New Jersey’s Legislature.
“I know that some will demand that Gov. Christie propose or accept a massive tax increase on a small number of our state’s citizens to generate more revenue to 'save’ programs or meet speculative court-ordered spending obligations,” the treasurer said during his testimony. “I can assure you that this governor will not sign a budget that increases taxes. As I said last year at this forum, to do so would break faith with the people of New Jersey — already the most highly taxed in the nation — and undermine New Jersey’s economic competitiveness and job creation.”
The New York Legislature is set Wednesday to pass a fiscal 2012 budget that allows an income tax surcharge to expire on Dec. 31. Sidamon-Eristoff estimates New Jersey will benefit from New York’s lower rate, as some New Jersey residents who work in the Empire State must pay taxes there.
He said New York’s 6.85% tax rate is very competitive, but he anticipates New Jersey will gain nearly $100 million in fiscal 2013 due to the lower rate.
Christie seeks lower taxes overall. His budget proposes $200 million of corporate tax breaks in the hope of altering New Jersey’s business reputation.
“It sends a message that New Jersey is willing to do what’s necessary in respect to tax policy to make itself more competitive,” Sidamon-Eristoff said. “And that is the key, key problem that we’ve faced, I believe — that New Jersey has allowed itself to be perceived as uncompetitive.”
Democrats stress that the administration’s deep spending cuts in municipal and school aid have forced localities to raise property taxes in a state that already has some of the highest real-estate taxes in the country.
In looking at Christie’s five-year financing plan for the New Jersey Transportation Trust Fund, the treasurer highlighted the administration’s move towards financing more infrastructure needs from the state’s operating budget rather than bonding. The plan includes $4.4 billion of borrowing during the next five years.
It also includes $343 million of funding in fiscal 2012 from the Port Authority of New York and New Jersey, which would need to review such spending.
The treasurer said that the Christie administration is “very confident” that the Port Authority will contribute to the transportation fund.
“We’re picking up no indications that that’s going to be an issue going forward,” he said.