N.J. Lawmakers Ordered to Return for Special Tax Session

New Jersey lawmakers are under order to return to the Statehouse in Trenton today after Governor Chris Christie called a special session when he failed to win a tax cut from the Democratic-controlled Legislature.

The 49-year-old Republican plans to address a joint meeting of the Senate and Assembly at 1 p.m. He called the session June 30, a day after he signed a $31.7 billion budget that he said holds “tax relief hostage.” Democrats sent Christie a spending plan June 25 that would delay a tax cut until they have confidence that revenue will meet his targets.

Christie, who faces re-election in 2013, has traveled the state to tout what he calls a “Jersey Comeback,” an economic- recovery plan fueled by a 10 percent income-tax cut. His calls for smaller government and lower taxes have made him a national Republican figure. The special session will be “a little bit of a dance,” said Ben Dworkin, director of the Rebovich Institute for New Jersey Politics at Rider University in Lawrenceville.

“Democrats have no desire, politically, to give this governor a guaranteed tax-cut victory on the eve of the Republican National Convention” in August, Dworkin said June 30. “They don’t want to promise a tax cut on revenue that’s not going to be there.”

Growth Forecasts

The budget Christie proposed in February for the fiscal year that began July 1 predicted revenue growth of 7.2 percent, the second-most hopeful projection after California’s, according to the National Governors Association. Standard & Poor’s in February called New Jersey’s plan unbalanced and dependent on “optimistic” economic forecasts.

Treasurer Andrew Sidamon-Eristoff, a Christie appointee, has since said that revenue through June 2013 may be $700 million less than Christie’s target, while the Legislature’s chief budget analyst has said the gap may be almost twice that.

Lawmakers typically recess in July and August. New Jersey’s constitution allows governors to bring them back into session “whenever in his opinion the public interest shall require.” While Christie may convene the session, under state law Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver, both Democrats, control the agenda.

“While the last thing anyone wants in the middle of a heat wave is hot air coming from Trenton, we will be there,” Sweeney said in a June 30 statement in response to the session.

‘More Theater’

Senator Loretta Weinberg, a Teaneck Democrat, said in a June 30 telephone interview that she didn’t know what the party’s strategy will be. She called the governor’s move “more theater for Christie.”

“What’s he going to do?” she said. “Lecture us?”

Brigid Harrison, a professor of law and political science at Montclair State University, said the session won’t happen if the Legislature lacks a quorum, the result of members not reporting to the Statehouse. Another scenario, she said, may be that leaders open and close the session without taking action.

In either case, the governor may continue to call sessions all summer, Harrison said, adding that she didn’t think it would reach that point.

“There is some negative public relations to deal with if the Legislature is seen by the public as not wanting to take action on a tax cut,” she said by telephone on June 30. “I don’t think anyone wants to deal with that.”

Immediate Attention

New Jersey residents shoulder the highest combined state and local tax burden, 12.2 percent of their income, according to the Washington-based Tax Foundation. The national average is 9.8 percent.

Christie notified Sweeney and Oliver of the special session at which he hopes to reduce that in a letter, according to his June 30 statement.

“The budget, which contained billions of dollars in spending, failed to address the single issue that strikes at the heart of our shared interests, and our continued prosperity,” Christie said in the letter. “Lowering the tax burden on every New Jersey resident is a matter of unique and critical interest that demands our immediate and full attention.”

The Democrats stuck with Christie’s revenue and spending levels in their budget, while swapping his proposed 10 percent income-tax cut for a property-tax credit conditional on revenue meeting the governor’s projections. Christie signed the plan after erasing $361 million in Democrats’ spending add-ins, including tax credits for the working poor, and technology grants for private schools.

Christie, during a June 29 interview in his office, said he will travel to “every corner of this state” in coming months to prod Democrats into releasing $183 million set aside in the budget for tax credits.

“As governor you have two bits of leverage: whatever power or authority in the office you have, and the bully pulpit,” Christie said. “I’m going to use both of them.”

To contact the reporters on this story: Terrence Dopp in Trenton at tdopp@bloomberg.net; Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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