TRENTON - New Jersey lawmakers on Monday passed a measure recommended by Gov. Christie to increase a tax credit for the working poor that could boost the take-home pay of more than a half-million households.
The move came after Christie rejected the Democratic-controlled Legislature's proposal to raise taxes on income exceeding $1 million. The Republican governor vetoed that bill Friday and instead proposed increasing the state's earned income tax credit (EITC) from 20 percent to 30 percent of the federal credit.
Christie made that proposal the same day he signed into law a $33.8 billion budget for the fiscal year that begins Wednesday.
Democrats had submitted a $35.3 billion budget that included revenue from the so-called millionaires tax to make a bigger contribution to the pension system for public workers.
Democrats and other groups that typically oppose Christie's policies praised his proposal to increase the EITC, which they noted he had reduced from 25 percent to 20 percent in 2010 amid a budget shortfall.
Since then, Democrats and Christie had exchanged competing proposals for increasing the credit, but ultimately couldn't reach a compromise.
On Monday, the Senate and Assembly each concurred with Christie's conditional veto of the millionaires tax. The bill now heads back to Christie for his signature.
Democratic leaders said they did not consider or care whether Christie may tout the policy on the presidential campaign trail. He is expected to announce his candidacy Tuesday.
"We're celebrating," Senate Majority Leader Loretta Weinberg (D., Bergen) said at a Statehouse news conference. "It is fair. It is appropriate. You know what? It'll help the economy."
The credit helps more than 500,000 households in the Garden State, according to New Jersey Policy Perspective, a left-leaning research group.
To qualify, a single person with no children cannot earn more than $14,820; the limit for a married couple filing jointly with three qualifying children is $53,267, according to 2015 IRS data.
The maximum federal credit for the latter is $6,242. New Jersey tax filers currently can earn an additional 20 percent of that, or $1,248. Under the new law, that will increase 50 percent to $1,876.
Recipients of the credit on average will gain an extra $250 annually, according to New Jersey Policy Perspective. Take-home pay for the state's lowest earners will increase by up to $600, according to the group.