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‘Millionaire’s tax’ vetoed by Christie

christieTL052010_optSurcharge would have raised $635 million

BY TOM HESTER SR.
NEWJERSEYNEWSROOM.COM

Republican Gov. Chris Christie Thursday evening vetoed two related bills approved by the Democratic-controlled Assembly and Senate earlier in the day to restore an income tax surcharge on the 16,000 New Jerseyans who earn more than $1 million annually as a way to raise $635 million to finance the restoration of property tax rebates for more than 600,000 seniors and disabled.

The Assembly voted 46 to 31 on the main bill (A-10) and the Senate approved the bill (S-10) along party lines with Democrats providing the votes needed for passage, 23-17. Debate on the proposal lasted over an hour in both the Assembly and Senate.

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.

Both Assembly Speaker Sheila Y. Oliver (D-Essex) and Senate President Stephen M. Sweeney (D-Gloucester) took the unusual step of placing both houses under call, moves that prevented legislators from leaving the chambers. It also meant that if a lawmaker tried to abstain on the votes, it would count as a vote in favor of the legislation.

Republicans in the Assembly described the action as theatrics.

The lower house Republican 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 in the Assembly and Senate to approve a companion bill (A-20) in the lower house and (S-20) in the upper house that would dedicate the revenue from the surcharge to financing the rebates and prescription increases. The Assembly vote was 46 to 32 came after an hour of debate. In the Senate, the Democratic majority provided the votes needed for passage, 23-17.

In vetoing the legislation, Christie said that he "would not repeat the failed, irresponsible and unsustainable fiscal policies of the past by raising taxes on the highest taxed people in the nation.''

Further, the governor pointed to New Jersey's poor economic condition and cited the negative impact an additional tax increase would have on the state's economic recovery and job creation efforts. He said the veto of A-10 rejects the adoption of the 116th tax increase on New Jerseyans in the last eight years.

Reacting to the vetoes, Oliver said, "Governor Christie has made it clear that he stands for millionaires over our most vulnerable senior citizens. That's disappointing. Our plan simply asked our 16,000 most fortunate residents to share in the sacrifice to help more than 600,000 senior and disabled residents. It was a compassionate plan that wasn't too much too ask to protect our parents, grandparents and neighbors.''

In vetoing A-20, Christie cited concerns about the bill's constitutionality, action already taken by his administration to restore funding for the PAAD and Senior Gold programs, as well as the imprudence of restoring additional spending commitments in the current fiscal and economic climate.

Democrats said $563 million of the $635 million would have gone for rebates and $72 million to head off prescription increases.

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 had been 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.

Assemblyman Paul T. Moriarty (D-Camden) described the vote on the so-called "millionaire's 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 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 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.''

In the Senate, Sen. Kevin J. O'Toole (R-Passaic) said New Jersey millionaires pay over $300,000 annually in income and property taxes. "I don't know when New Jersey became a state where we penalize success,'' he said.

 
Comments (2)
2 Friday, 21 May 2010 11:53
Average Joe
Gov. Chrisite claimed that this tax would drive millionaires out of New Jersey. Do the math...$635 million dived by 16,000 millionaires = $39688. Would that really make a millionaire leave the State. I think not. Thousands of average people are leaving New Jersey, many from South Jersey are moving to Deleware to save thousands of dollars on their taxes. I think I may be right behind them. This mess in new Jersey proved the old saying..."The rich get richer".
1 Friday, 21 May 2010 04:05
JACNJ
Tom,

Great article and you do great work. But I'm writing to note an error in your article above.

You wrote, "[placing the House under call] also meant that if a lawmaker tried to abstain on the votes, it would count as a vote in favor of the legislation." That's not accurate.

In the General Assembly, when a motion has been made and seconded to place the House under call, the House takes a vote on that motion -- any member who fails to vote or who abstains on that vote is considered to have voted in favor of the motion to place the House under call.

Once that initial motion passes and the House is operating under call, Assembly Rule 8:2 states that any member who fails to vote on a question or who abstains from voting MAY be recorded as voting in the negative (unless the abstention was for a conflict of interest and prior notice of the conflict was given to the Clerk.) The Rules are clear: when the House is operating under call, a Member's failure to vote may (but need not necessarily) lead to that Member being recorded as a Nay. The Rules do not permit the Speaker to record an absent or otherwise nonvoting member as voting for the question, once the House is under call.

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