(Corrects to show revenue shortfall is for two-year period in fifth paragraph.)
While at the Federal Reserve Bank of New York, Steindel co- wrote a research report in which he said a tax surcharge on the wealthy would help offset lower revenue during an economic slowdown. Bloomberg News published an article on the study yesterday.
Today, speaking to the Senate Budget Committee in Trenton, Steindel, 60, said New Jersey doesn’t need such a tax increase. He said he didn’t recommend the surcharge while at the New York Fed and only mentioned it in the report as an option. He joined the Christie administration in November 2010, four months after the report.
“We are fortunately not in that position now and revenue is increasing,” Steindel said. “There is no evolution in that, no contradiction in thought.”
As Christie’s chief economist, Steindel has projected the state’s revenue collections will rise 7.3 percent in the fiscal year beginning July 1 to fund the governor’s $32.1 billion budget. David Rosen, chief revenue forecaster for the nonpartisan Office of Legislative Services, today projected revenue will lag behind those estimates by a combined $537 million for this fiscal year and next.
“Temporarily raising income taxes on high-income households during a downturn” would have the advantage of placing “a larger burden on households that are less liquidity- constrained,” Steindel, wrote in the July 2010 report with economists Richard Deitz and Andrew Haughwout.
Christie, 49, a first-term Republican, has twice vetoed measures sponsored by Democrats that would have raised income taxes on residents earning $1 million or more. He has said any increase would halt the state’s economic recovery, and that the 10 percent income-tax cut he proposed in January is the key to bringing jobs back to New Jersey.
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