TRENTON — State Treasurer Andrew Sidamon-Eristoff told lawmakers Tuesday that Gov. Chris Christie would veto any budget that includes a millionaire’s tax, setting the stage for one of many potential budget battles in the upcoming weeks. "I can assure you that this governor will not sign a budget that increases taxes," Sidamon-Eristoff told the Assembly Budget Committee as he...
Andrew Sidamon-Eristoff, left, takes questions from the media with Gov. Chris Christie at his side, in this 2010 file photo.TRENTON — State Treasurer Andrew Sidamon-Eristoff told lawmakers Tuesday that Gov. Chris Christie would veto any budget that includes a millionaire’s tax, setting the stage for one of many potential budget battles in the upcoming weeks.
"I can assure you that this governor will not sign a budget that increases taxes," Sidamon-Eristoff told the Assembly Budget Committee as he discussed Christie’s $29.4 billion spending plan. "To do so would break our faith with the people of New Jersey and undermine New Jersey’s economic competitiveness and job creation."
The treasurer’s warning came less than a week after a special master said Christie’s cuts in state aid for schools violated New Jersey’s mandate to provide "a thorough and efficient" education, sending the potentially costly issue to the state Supreme Court.
Sidamon-Eristoff said he hopes the justices would "give due deference to the broad discretion the executive and Legislature must have to protect the state’s fiscal integrity, particularly in times of economic stress."
The treasurer’s statement on the millionaire’s tax did not stop Democrats from pushing the plan, which would raise the top tax rate on all earning above $1 million. Democrats tried to increase the rate last year, but Christie vetoed the bill.
Democrats say it would generate about $600 million and would be used to provide residents with property tax relief.
"When I walk into Wawa, I don’t have millionaires coming up to me and complaining about the income tax," said Budget Committee Chair Lou Greenwald (D-Camden). "But I do have residents asking me what we’re doing about property taxes."
Sidamon-Eristoff and Republican lawmakers said the tax would make the state less business-friendly and drive out top earners, who already account for roughly 40 percent of all income tax revenue. He said the state’s over-reliance on top earners has created a boom-and-bust revenue cycle that is too unpredictable.
Lawmakers also tried to squeeze details about Christie’s plan to overhaul Medicaid — which provides medical assistance to the state’s poor and disabled — and save $300 million through a waiver from the federal government. The administration has yet to disclose the changes and how it would save $300 million. It has not yet filed the application.
Sisamon-Eristoff provided little illumination, urging members to wait and ask questions of the state health department when it goes before the committee. He did say the waiver would give the state flexibility to determine things like eligibility requirements and what programs to fund. The savings are "reasonable and doable," but wouldn’t be realized until after the feds approve the application, he said.
"I love mystery books. I read them on the weekend. This budget is full of mysteries, but I don’t know who the victims are," said Assemblywoman Joan Quigley (D-Hudson), referring to the Medicaid changes. She added: "No plan, no support."
The administration is projecting current year revenues to outpace initial estimates by about $100 million, thanks to a boost in income and business tax receipts. In the proposed budget, revenues are projected to rise by $1.2 billion, enough to cover loss in federal stimulus dollars and provide $200 million in business tax breaks.
But Sidamon-Eristoff cautioned the upbeat revenue estimates are not a "clear signal" that the economy has turned around.
"There are many economic and timing factors still at play," he said, noting the state will have a much clearer outlook after the April income tax deadline.
Previous coverage:
• N.J. treasurer says Christie intends to refuse millionaire's tax
• N.J. Dems plan vote to override Gov. Christie's 'millionaires tax' veto
• Public worker unions plan massive rally in Trenton against Gov. Chris Christie's budget cuts