While the tentative détente reached between Gov. Chris Christie and Senate President Steve Sweeney over a tax cut program may strike some as bipartisanship at its finest, in reality it is a cold-eyed recognition that entering the 2013 gubernatorial and legislative election campaign promising property tax relief rather than delivering it will invite serious voter backlash.
Less than a month ago, the Democratic legislative leadership ripped into Christie’s call for a 10 per cent cut in state income tax rates, denouncing it as a bonanza for the rich and table scraps for the middle class and vowed to offer its own plan to address what they said is the genuine burden on homeowners --- the property tax.
With the average property tax bill approaching $8,000 a year --- the highest in the nation --- Democrats argued that it, not the income tax, is to blame for stifling economic growth and undermining efforts to attract business development and job creation.
When Sweeney rolled out his party’s program --- a phased in tax credit scheme to allow homeowners with incomes under $250,000 to take 10 percent of their property tax bill as a credit against their income tax --- Christie immediately glommed onto it, suggesting that he and Sweeney were on the same page and his tax cut idea was, at its core, the same as the Senate President’s.
Sweeney reacted as if he’d caught the Governor poaching game in his backyard. The two proposals, he said, are competing ones rather than complementary ones and reiterated that the Governor’s plan lopsidedly favors the wealthy and addresses the wrong tax while his provides broad property tax relief to middle class families. The only similarity, he said, was its’ roughly $1 billion cost when fully implemented.
At the same time, Assembly Democrats offered up a different plan, providing for a tax credit similar to Sweeney’s but financing part of it by reinstating the surtax on the wealthy --- the so-called millionaire’s tax.
Why the Senate and Assembly Democrats failed to unite behind one idea isn’t clear, but the point of divergence is the millionaire’s tax.
By clinging to its reinstatement, Assembly Democrats are fighting the last war. The outcome will be the same --- they’ll lose.
Their strategy plays directly into Christie’s hands, teeing up his argument that Democrats are obstructionists, willing to block relief of any kind because they want to increase taxes. He will portray himself as a tax cutter and Democrats as tax raisers. He will repeatedly pound them as the party responsible for killing tax relief. It is an argument the Democrats cannot win.
Sweeney conceded as much when he said he did not include the millionaire’s tax in his proposal because it is his goal to enact a tax cut this year and the surtax idea would torpedo the effort. Christie, he pointed out, has already vetoed the surtax twice and has pledged to do it again.
Implicit in his comments is that any effort to use a veto of the millionaire’s tax as a campaign issue will fail. Christie will have the more persuasive argument on his side; namely, that he fought to cut taxes while his legislative opponents fought to raise them.
There is a certain parallel between the Governor’s position and the strategy employed by President Obama to force Congressional Republicans into approving extension of the Federal payroll tax holiday with the argument that failure to do so would amount to a tax increase for working Americans.
Just as Obama maneuvered Republicans into a politically untenable position --- a fact admitted by House Speaker John Boehner --- so Christie will do to the Democrats if confronted with a Democrat-approved millionaire’s tax.
By embracing the concept behind the Sweeney proposal and leaving the details to later negotiations, Christie has portrayed himself as a reasonable person willing to compromise and engage in political give and take to achieve a greater goal.
Sweeney understands the enormous political benefit which will accrue to the Democratic Party if it produces tax relief its candidates can campaign on and convince voters that helping overburdened and economically-hurting middle class New Jerseyans is their first concern.
His strategy is imperiled, though, by his Assembly colleagues’ demands for reinstating the millionaire’s tax. Will he be able to convince them that their opportunity to reap credit for tax relief is severely jeopardized by their position, and the Governor will be the ultimate winner in any showdown?
Sweeney acknowledges that in poll after poll the surtax reinstatement enjoys broad public support. But, he acknowledges also that public desire for property tax relief outweighs the desire for taxing the wealthy.
The Christie-Sweeney nuptials may be a shotgun wedding, but both realize that walking down the aisle together is preferable to walking the plank together.
Carl Golden is a senior contributing analyst with the William J. Hughes Center for Public Policy at Richard Stockton College.