March 7 (Bloomberg) -- New Jersey Governor Chris Christie said he and the Legislature’s highest-ranking Democrat are “pretty close” on a tax-cut plan, a signal that a deal may be near in the nation’s highest-taxed state.
Christie, a first-term Republican, also rejected as ‘dead’’ a version from Assembly Democrats that includes a bigger tax reduction for residents earning as much as $250,000 and an increase for those making $1 million or more.
Senate President Stephen Sweeney yesterday called for giving middle-class families a 10 percent property-tax credit on their income-tax returns, countering Christie’s plan for a 10 percent across-the-board cut in income-tax rates. Assembly Democrats want a 20 percent property-tax credit. Democrats control both houses of the Legislature.
“We’re pretty close, so now let’s see if we can find an area of compromise,” Christie said of Sweeney’s proposal. “I think everyone should get tax relief and he limits it at $250,000 -- there’s a boulevard there between them. Lets see if we can get the car onto that boulevard and move it down the road.”
New Jersey taxpayers in 2009 shouldered the highest state and local tax burden in the U.S., according to a ranking by the Washington-based Tax Foundation. New Jersey also has the highest property-tax bills, an average $7,759 in 2011.
“The Senate president is thrilled that Governor Christie is acknowledging the need to cut property taxes for middle class people in New Jersey,” Chris Donnelly, a Sweeney spokesman, said in an e-mail. “He also hopes that acknowledgment is also an indication that Governor Christie realizes he has to stop coddling the wealthy at the expense of everyone else in New Jersey.
Sweeney said his proposal would lower residents’ income-tax bills and relieve pressure from real-estate levies. He said his plan would cost $174 million in the budget year starting July 1 and rise to $1.4 billion when fully phased in over four years. Christie’s reduction would cost $183 million in the coming year and $1.1 billion by the fourth.
Christie, who is midway through his first term, froze $2.2 billion in spending to close a midyear deficit in 2010, and then cut $10 billion in projected new spending for schools, pensions and towns. He is now calling for a 10 percent income-tax cut over 36 months, which he said is possible now that New Jersey’s ‘‘fiscal house is in order.”
Christie has twice vetoed measures sponsored by Democrats that would have raised income taxes on residents earning $1 million or more. He has said any tax increase would halt the state’s economic recovery and deter businesses from expanding or moving to New Jersey.
The Assembly Democrats’ so-called 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, they said.
“The only conclusion you can come to is that they’re doing this for political reasons, and that’s fine,” Christie, 49, told reporters today in Trenton. “I will do the same thing that I did to it the first two times: I will veto it and send it back. So if you want to go through another useless exercise, feel free to do that.”
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