March 6 (Bloomberg) -- New Jersey Democrats are proposing property-tax credits for residents earning as much as $250,000, countering Republican Governor Chris Christie’s plan for a 10 percent across-the-board cut in income-tax rates.
Senate President Stephen Sweeney today called for giving middle-class families a 10 percent property-tax credit on their income-tax returns, which he said would alleviate a pressing burden. Assembly Democrats today proposed doubling that property-tax credit to 20 percent.
Democrats, who control both houses of the Legislature, have said Christie’s plan favors the wealthy and that he should focus on easing residents’ property-tax burden. Christie has said he’s managed to “turn Trenton on its head” by forcing Democrats to debate cuts in a state that raised taxes and fees 115 times in the decade before he took office.
“This is a very simple plan -- this is not complex,” Sweeney, 52, told reporters today in Trenton. “We’re taking resources that the governor says are available and putting them on the tax that is the most pressing tax for the people of the state of New Jersey: the property tax; not the income tax.”
Sweeney, a Democrat from West Deptford, said his plan would cost about $174 million in the budget year that starts July 1 and would rise to $1.4 billion by the fourth year. Christie’s cut would cost $183 million in the coming budget and $1.1 billion by the fourth year.
Christie, 49, began holding public meetings in January to press his case for hastening what he calls “the Jersey comeback.” The governor, during a radio interview today on 101.5 WKXW-FM said he and Sweeney agree on the need to cut income levies and disagree over how.
Speaking during a town-hall meeting held as Sweeney was announcing his proposal, the governor said Sweeney’s plan is “not a bad idea.”
“There’s a place for us to begin a conversation,” Christie said. “We agree that taxes should be reduced in New Jersey, and this is such a change.”
Under Christie’s plan, someone earning $50,000 would pay $80 less while a person making $1 million would save $7,200, according to calculations from the non-partisan Office of Legislative Services.
Sweeney’s plan would give residents with incomes as high as $250,000 a credit of 10 percent of the first $10,000 in property taxes paid. A family earning $50,000 would get an average credit of $600, while a family making $100,000 would see $800, he said.
The Assembly Democrats’ plan also applies to income as high as $250,000 and would provide a 20 percent credit. A family earning $100,000 that pays $8,000 in property taxes would get $1,600. That compares with $275 under Christie’s plan, according to Assembly Democrats.
New Jersey residents pay the highest property taxes in the U.S. Their bills averaged $7,759 in 2011, up 2.4 percent from 2010, according to the state Department of Community Affairs.
Assembly Democrats plan to introduce their measure on March 8, said Majority Leader Louis Greenwald, a Democrat from Cherry Hill. Their proposal also calls for a so-called millionaire’s tax -- a surcharge on income of $1 million or more -- to fund the credits, he said.
“We’re pleased to see that the Senate agrees with us that it’s about property taxes, but I don’t think their plan is robust enough,” Greenwald, 44, said in a telephone interview today. “In this economy, the most important thing is to get people that money.”
Christie has promised to veto any tax increase, saying it would halt the state’s economic recovery and deter businesses from expanding or moving to New Jersey.
The millionaire’s tax would increase the rate to 10.75 percent from 8.97 percent beginning next fiscal year. That surcharge would affect about 16,000 out of 2.6 million filers and raise $800 million, Assembly Democrats said in a statement.
“Sixteen-thousand people in this state out of 2.6 million filers have gotten a free ride,” Greenwald said. “It hasn’t worked -- our economy is still in the doldrums.”
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