newjerseynewsroom.com

Democrats hope surcharge will raise $637 million for seniors, disabled

BY TOM HESTER SR.

NEWJERSEYNEWSROOM.COM

UPDATED

Disregarding Gov. Chris Christie's vow to veto the legislation, the Democratic-controlled Assembly Thursday approved a measure to restore an income tax surcharge on the 16,000 New Jerseyans who earn more than $1 million annually as a way to raise $637 million to finance the restoration of property tax rebates for more than 600,000 seniors and disabled.

The vote of 46 to 31 on bill (A-20) was along party lines with Democrats supporting the legislation and Republicans showing their support for the governor by opposing it. Debate on the proposal lasted over an hour.

The surcharge revenue was also intended to head off increases in prescription costs for seniors and disabled who participate in two state-run prescription programs but Christie announced Wednesday those hikes have been eliminated from his proposed $29.3 billion 2010-11 state budget.

Republican legislators unsuccessfully argued the bill was related to the proposed budget and could not be acted upon because a bill on the full budget has not been introduced. A bid to appeal a decision by Speaker Sheila Y. Oliver (D-Essex) that the bill was improper was defeated 46-32.

The Democrats also used their majority to approve a companion bill (A-10) that would dedicate the revenue from the surcharge to financing the rebates and prescription increases. A vote of 46 to 32 came after an hour of debate.

An analysis prepared last month by the nonpartisan state Office of Legislative Services reported that under the Christie plan to eliminate rebates, a retired couple living on a fixed income of $40,000 would see a $1,320 increase in taxes while a family making $1.2 million would receive a tax cut of $11,598.

If rebates for seniors and the disabled are restored, the average check would be $1,295, according to Democrats. People with incomes up to $150,000 would be eligible. Democrats also argue that the surcharge would cost millionaires 2 cents on the $1.

Assemblyman Declan J. O'Scanlon said New Jerseyans with incomes over $90,000 a year pay 92 percent of state taxes. He said millionaires pay 22 percent and people earning over $90,000 pay 70 percent.

Oliver took the rare step of ordering that the lower house be placed under call, a move that prevented the 80 legislators from leaving the chamber. She also warned that when the Assembly is under call, an abstention vote is considered a vote in favor of the legislation.

Republican legislators described Oliver's action as theatrics

Assemblyman Paul T. Moriarty (D-Camden) described the vote on the so-called "millionaires tax'' as a defining moment for legislators.

"I believe we have a question of who will get a tax break,'' he said. Will 600,000 seniors get a tax break or will 16,000,000 millionaires get a tax break? New Jersey is watching us. They will find out today who stands with 600,000 seniors struggling to keep their homes and who stands with 16,000,000 millionaires.

"We welcome discussion on the budget but let's be clear, the governor's plan to cover drug costs is based on assumptions and provides no guarantee to seniors,'' Moriarty said. "It still places a huge property tax burden on seniors and disabled. Our plan ensures that seniors and the disabled get the prescription help and property tax break they need.''

Assembly Republican leader Alex DeCroce (R-Morris) told Democrats, "It's always tax, tax and more tax,'' he said. "That's all you guys do. You could have voted on this during the lameduck Legislature (in December) but you let the surcharge die. Now you have a conscience. You are just telling the people of my generation ‘We are pandering to you because we've got no other way out of this mess.' Let's cut the jokes, let's get on the ball and do things right.''

O'Scanlon said his vote against the bills was not against seniors but for "fiscal sobriety.''