Democrats propose tax hike for millionaires, while Christie accuses them of pandering
Gov. Chris Christie holds up a set of 33 bills at the Statehouse this afternoon he called "Cap 2.5" putting a cap on property tax increases and state spending at 2 and 1/2 percent.
TRENTON -- New Jersey’s political divide grew wider today as Republican Gov. Chris Christie advanced sweeping plans to slow the growth of property taxes while Democrats proposed raising income taxes on the state’s wealthiest residents to pay for senior programs.
The dueling proposals — and sharp-edged rhetoric in back-to-back news conferences — showed the governor and Democratic lawmakers drifting apart with less than two months to go before the state budget deadline. Neither the budget nor Christie’s reforms can move forward without bipartisan support.
Also digging in for battle today were powerful public worker unions representing police, firefighters and teachers, whose salaries and benefits would be constrained under Christie’s plans to force local governments to control costs.
"This is our Armageddon," said Bill Lavin, the president of the Fireman’s Mutual Benevolent Association. "In a good economy, or a bad economy, we’re still a nation and state of laws, and a contract is a contract."
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Christie stressed his plan would keep property tax increases below 2.5 percent unless voters allow more in a referendum.
"It gives the ultimate trump card to the voters," he said.
Faced with Christie’s $29.3 billion budget plan that would cut many popular programs, top Democrats today said they could spare senior citizens and disabled residents by imposing a one-year income tax hike on those earning at least $1 million.
They said raising the tax on about 16,000 people would allow lawmakers to restore property tax rebates for more than 600,000 senior homeowners and tenants, and block Christie’s plan to increase co-payments and charge a new $310 deductible to 105,000 senior and disabled citizens under the Pharmaceutical Assistance to the Aged and Disabled program, known as PAAD. "The governor’s refusal to agree to reinstate the millionaire’s tax will guarantee that ... thousands of seniors and the disabled will edge over into poverty," said Senate Majority Leader Barbara Buono (D-Middlesex). "That is perverse logic."
Christie immediately rejected the Democrats’ proposal, accusing them of trying to "pander" to senior citizens with a one-year fix that would harm the state’s broader economy. He repeated his vow to veto any tax increase, and characterized the dispute as a "philosophical difference."
"The difference is the Democrats in the leadership of the Legislature want higher taxes, more spending and a temporary Band-Aid approach to property tax relief," Christie said. "The moment has arrived for us to have a property tax system that can be controlled, that can be sustainable, and that can work for the people who are paying the bills."
Top Democrats did not sign on to his 33-bill package, anchored by a constitutional amendment that would limit annual property tax hikes to 2.5 percent, except when local voters decide to override it. Contract awards for public workers like police, firefighters and teachers — including salaries, health benefits, vacation time and other perks — also could not increase by more than 2.5 percent a year. Christie also wants to allow towns to opt out of civil service rules and place a $15,000 cap on unused sick leave payouts for current workers.
The constitutional limit, modeled after a similar property tax system in Massachusetts, would replace the current 4 percent cap law that Christie says has too many exceptions but Democrats say is working. In 2009, the average residential property tax bill was $7,281 — but the 3.3 percent average increase was the smallest in a decade.
Union leaders said Christie’s reforms would undermine employee rights and similar moves in other states led to fewer police officers, firefighters and teachers as well as a greater disparity between wealthy and poor towns.
Christie said politicians have not controlled property taxes and voters deserve a chance. "I am putting my trust and my faith and my confidence in local rule here in New Jersey," he said.
By Claire Heininger and Lisa Fleisher
Staff writer Rohan Mascarenhas contributed to this report.
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