Despite being spurned not once but twice with vetoes from New Jersey Governor Christie(R), Democrats in the New Jersey Assembly are trying again to impose a “millionaire’s tax” in the state. The proposal would increase the tax rate by nearly 2%, from 8.97% to 10.75% for those at the top: those earning at least $1 million.
Christie, in contrast, is talking up tax cuts, a measure that many in the legislature consider financially risky. Collections in the state are down and it’s currently estimated that at the current rates, the state will have a shortfall of more than $1 billion in the next three years. The tax hike would raise just short of that, at $800 million.
The millionaire’s tax wouldn’t merely fill the gap. Rather, the proposal is viewed as sort of a “Robin Hood” tax since at least one version of the plan would divert funds raised towards property tax relief for some seniors and homeowners with incomes of less than $75,000 annually. Christie’s plan would also include property tax relief with no offset in revenue.
The dueling proposals come in the wake of conflicting news in the Garden State. Revenues are down overall in the state but employment figures show that New Jersey added a number of jobs last month, the most in seven years. Empirically, that works out to one in four net new jobs created in America last month as created in New Jersey, a figure touted by Gov. Christie this week:
The statistics also support the notion that the economy in New Jersey is on the upswing, despite a downturn in revenue: the state has added jobs in eight of the last nine months.
Democrats, however, say that the focus on the increase overshadows the bigger concern that New Jersey’s unemployment still trends above the national average. Despite the good news, the unemployment rate rose last month to 9.2%, one percentage point above the U.S. level. New Jersey’s unemployment rate has been at 9% or higher for three straight years.
The news prompted Assemblyman Lou Greenwald (D) to say, “Unemployment went up again today. These are the job creators — where are they?”
Taxpayers aren’t overly fond of the millionaire tax (the state has been split on the issue since Christie took office in 2010) but many are concerned about what shortfalls in the budget might mean for state services, especially as it relates to education both at the elementary and college levels. Despite those reservations, the Governor’s job performance ratings are the highest they’ve been since he took office – half of all polled responded that they regarded him favorably.
With the numbers flying, both sides are gearing up for a fight. The timing couldn’t be better for Christie, who is expected to play a major role in the Republican National Convention slated for August. If he’s able to manage yet another veto, it will clearly establish him as the leader in the state, despite a Democrat controlled Assembly.
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