Democrats who control New Jersey's Legislature are teeing up a budget showdown with Gov. Chris Christie that appears destined to end with the Republican governor's veto.
Republicans expect Christie will use his line-item veto power to strip out many of the proposals Democrats unveiled Monday in a $35.3 billion budget, which includes more than $1 billion in higher taxes.
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They say it makes good on a 2011 obligation to pay $3.1 billion into the state's pension fund despite a state Supreme Court ruling that bolstered Christie's proposal for a $1.3 billion payment. Democrats proposed higher taxes last year as well, but Christie vetoed them.
"This is a budget plan built around fiscal responsibility," Assembly Speaker Vincent Prieto said. "We need to balance our budget and meet the state's pension obligations, all while advocating for New Jersey's working class residents."
State business groups and Republicans, holding a statehouse news conference before the budget was announced, pre-emptively denounced the expected budget, saying higher taxes would cost jobs.
"Simply put the Senate president's plan is going to fail again this year," Senate Minority Leader Tom Kean Jr. said.
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. Sen. Paul Sarlo, who discussed the proposal with reporters, declined to give more details about that tax.
Democrats are also counting what they predict to be about $700 million in higher-than-expected tax receipts for this fiscal year and the next one.
"Nobody wants to take these measures," Sarlo said. "But at the end of the day we have an obligation to make this pension payment."
The Democratic proposal also 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.
Assembly Democrats have signed off on the proposal, Sarlo said.
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.
The fiscal year ends June 30. The budget is expected to be reviewed in committee on Tuesday and voted on by the full Legislature later this week.