Christie proposes new tax-credit plan

With a touch of theatrics and an eye toward his reelection, Gov. Christie used Monday's tax deadline to drop a revived tax-credit plan on the Democrats who control the Legislature.

"Everybody who works and makes up to $400,000 would be getting a tax cut under this plan," the Republican governor announced.

The plan would not cut property taxes for New Jerseyans, who have the nation's highest average property-tax bill. Instead, similar to a plan Christie unsuccessfully pushed last year, it links a 10 percent reduction in income taxes to how much a homeowner pays in property taxes, and restores Christie's previous cut in a tax credit for the working poor.

But two of Christie's words matter most as he faces reelection in 61/2 months: tax and cut.

"I assume that it will be a substantive campaign discussion if [the Democrats] don't pass it," Christie said.

As of Monday, it didn't look as if they would.

Christie's expected gubernatorial opponent, State Sen. Barbara Buono (D., Middlesex), said she wanted any tax cut for the middle class to come from the rich through a so-called millionaire's tax, which Christie has previously vetoed.

She also criticized him on two separate tax issues. First, Christie is delaying the homestead rebate program for senior citizens, the disabled, and those making $75,000 or less. After Christie's revenue numbers came in below his expectations, Christie held about $400 million in rebates until after the new fiscal year begins in July.

Buono also noted that "the working poor have suffered a tax hike" under Christie because he lowered the earned-income tax credit.

Christie would restore that reduction as part of his new plan. In fact, he made his proposal through a "conditional veto" to a Democratic bill that sought to restore his previous cut to that credit.

The centerpiece, though, is that homeowners with $400,000 or less in income would get a tax credit equivalent to 10 percent of their annual property-tax bills. The credit would be phased in over four years and be capped at $10,000 a year.

Average savings would be $775 per household, according to Christie. And renters would get a gradual increase in their tax credit to $200 per year by 2015.

Christie did not say how much the proposal would cost or how the state would pay for it. He made his announcement Monday morning on a friendly radio station, New Jersey 101.5. He didn't take questions from reporters at the Statehouse later in the day.

The proposal is similar to the income-tax-cut plan Christie offered last year during a special summer address to the Legislature. Democrats blocked the plan because, they said, Christie's budget overestimated how much revenue the state would take in and the state couldn't afford the tax cut.

Instead, Democrats at the time set aside $193 million for a cut if revenues reached their targets.

To address revenue concerns, Christie now is offering a "revenue circuit-breaker" that would allow the Legislature to prevent implementation of the cut if the state could not afford it. The Legislature would be able to act without the governor's signature.

Last week, David Rosen, a budget analyst for the nonpartisan Office of Legislative Services, testified that revenues for closing the fiscal 2013 budget could come up $302 million short. Treasurer Andrew P. Sidamon-Eristoff, who also testified, disagreed, saying the state would not have a shortfall.

The state's top elected Democrat, Senate President Stephen Sweeney (D., Gloucester), said Monday that if the numbers looked better next month, he would consider restoring the homestead rebates before taking up the Christie proposal.

"The real issue is that there's been too many gimmicks for too long in New Jersey that have destroyed the economy of the state," Sweeney said. "I don't want to see a couple hundred million dollars in other cuts to very important programs, like maybe education or something else, in order to provide something that is temporary and is not meaningful."

Assembly Speaker Sheila Oliver (D., Essex) was dismissive, too.

"The governor has failed to reveal how he intends to finance the higher education restructuring act he demanded to have enacted last July, finance the future infrastructure needs of New Jersey, and has failed to address New Jersey's burgeoning unemployment rate," she said in a statement. "Election-year posturing to the citizens of our state is shameful."

Republican legislators are on board. They have called for a special legislative session to vote on Christie's proposal.