TRENTON, N.J. – New Jersey residents with low incomes could see higher tax rebates under a proposal from Gov. Chris Christie being considered by the Legislature.
Continue Reading Below
The Assembly approved the proposal Monday, one day before Christie is to announce his presidential campaign in northern New Jersey.
Democrats and Republicans exchanged sarcasm-laced barbs over the legislation, which arose from Christie's conditional veto of the Democrats' tax increase on income over $1 million.
Democrats thanked Republicans for supporting the tax credit, which Christie has previously opposed. And Republicans praised Democrats for agreeing the tax increases were a bad idea.
"Is it clear that this is a concurrence on the veto, which would include a veto on the millionaire's tax?" asked Minority Leader Jon Bramnick. "I want to thank the majority party for finally finding a tax that they don't like."
Majority Leader Lou Greenwald predicted low-income workers would "finally" get their tax credit.
Continue Reading Below
Under current law, low-wage earners can receive 20 percent of their federal earned income tax credit rebate. Christie proposes increasing the rate to 30 percent.
The liberal think tank New Jersey Policy Perspective says the change would result in an annual pay increase of almost $600 for those getting the rebate.
Democrats proposed raising the rate to 25 percent this year along with a tax on millionaires but Christie vetoed the surcharge and instead called for increasing the credit.
The debate comes after Christie signed a $33.8 billion budget into law on Friday. In addition to the tax on millionaires, he also cut out a surcharge on the state business tax.
Despite the budget's enactment, some significant questions remain unanswered.
The biggest sticking point among lawmakers and labor has been the failure to fund the public pension according a plan laid out in a 2011 law. They argue the pensions are deferred compensation and by not paying more into the fund now, costs will rise in the future.
To that end, Democrats are proposing making the payment early in the fiscal year, which begins Wednesday. The Assembly passed the resolution on Monday.
"These are difficult fiscal times, which means we have to be creative and consider all responsible options," Assembly Speaker Vincent Prieto said.
Christie acknowledges the pension system is on an unsustainable course. He wants reforms to go further than they did in 2011, when pension beneficiaries increased their payments and lost a share of their cost-of-living adjustments.
It's not enough, Christie says, adding that for $195,000 in payments that the average teacher pays into the fund over a 30-year career, he or she gets back $2.6 million in benefits.