The Democrat-led Legislature is advancing a multibillion-dollar budget, setting up what lawmakers expect will be a line-item veto by Republican Gov. Chris Christie.
The Assembly and Senate budget committees on Tuesday took up a just-unveiled $35.3 billion budget that contrasts sharply with Christie's $33.8 billion spending blueprint.
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The Assembly Budget Committee passed the document along party lines, and its Senate counterpart is expected to take it up later in the day.
The proposal includes a tax increase on income over $1 million as well as a corporate business tax surcharge of 15 percent. Democrats also are making a $3.1 billion payment to the public pension, compared with Christie's proposed $1.3 billion.
The Democratic proposal comes as Christie considers a run for the White House and as the fiscal year ticks closer to its June 30 expiration. It's also a familiar legislative tug-of-war. Democrats have previously proposed raising taxes, only to see Christie line-item veto them out.
Democrats say their proposals make good on a 2011 obligation to pay into the state's pension fund despite a state Supreme Court ruling that bolstered Christie's proposal for a reduced payment.
"The question for us becomes how does one pay one's bills?" said Budget Committee Chairman Gary Schaer, adding that Democrats are not happy about proposing a tax increase.
State business groups and Republicans denounced the expected budget, saying higher taxes would cost jobs. Assembly Minority Leader Jon Bramnick also indicated that Democrats are trying to appease their political backers from organized labor.
"The Democrats have a simple plan, and that is they feel pressure from the public unions to take some strong action to push back at the governor," he said.
Democrats dismissed the notion that politics played any part in their budgeting.
State Senate Budget Committee Chairman Paul Sarlo said his party "feels strongly about living up to the commitment we made."
To make up the nearly $2 billion disparity in the pension payment, Democrats proposed a tax increase on income over $1 million a year, which is expected to bring in almost $700 million a year. They also proposed a one-year, 15 percent surcharge on the corporate business tax, which will haul in more than $400 million. Sarlo, who discussed the proposal with reporters, declined to give more details about that tax.
Democrats are also counting on what they predict to be about $700 million in higher-than-expected tax receipts for this fiscal year and the next one.
The Democratic proposal includes an additional $175 million, including $50 million for higher education and $10 million for public education. Sarlo also said the spending blueprint would include funding for Planned Parenthood, which Christie has previously stripped out of Democratic budgets.
Christie has said he would veto any income tax increases and generally has criticized Democrats over their calls to raise taxes.
If the governor uses his line-item veto to cut out the surcharges, his $33.8 billion budget would become law. His proposal, unveiled in February, keeps education funding flat, does not raise taxes and makes what the administration says is the largest pension payment in state history.
A vote by the full Legislature is expected later this week.