TRENTON — After weeks of private negotiations and public bickering, the Senate Democrats and Republicans last night were on the verge of reaching an eleventh-hour compromise on Gov. McGreevey's $1 billion corporate-tax plan.
An agreement was announced about 10 last night - just four days before a Sunday deadline for enacting a new budget - but it soon became clear that one issue still needed to be worked out. Legislators were trying to agree on when and if the corporate tax would expire.
An agreement would break a legislative logjam and set the stage for a weekend approval of the governor's controversial $23.4 billion budget.
The Senate budget committee went into a special hearing late last night to consider the $23.4 billion budget bill, the corporate-business-tax plan, and three other related bills.
"It's become the linchpin to move the process forward," Sen. Wayne Bryant (D., Camden), cochairman of the Senate Budget and Appropriations Committee, said of the business-tax plan.
The agreement that was being negotiated would keep the one thing that business groups had wanted to eliminate from the plan: an alternative minimum assessment. The assessment would provide the state with an alternative way of taxing corporations, generating a higher amount in many cases.
The Senate is evenly divided between Democrats and Republicans, giving the GOP leverage to negotiate changes to the corporate-tax plan.
Before breaking to resume negotiations on the business-tax plan, the committee approved three budget-related bills:
Raising $1.075 billion by selling bonds to be paid off by the annual payments the state receives from the national tobacco settlement.
Preserving the state's estate tax and about $75 million in tax revenues next fiscal year by keeping the exclusion limit at $675,000 rather than follow the federal government's lead and slowly phase out the tax.
Increasing the cost of environmental permits, corporate filings, boat registrations, and other state fees to raise about $100 million.
Earlier yesterday, Senate Democrats won approval of a 70-cents-per-pack increase in the cigarette tax, up to $1.50, for about $280 million in additional revenue.
Sens. Robert Martin (R., Morris) and Robert Singer (R., Ocean) were the only Republicans to vote for the cigarette tax, joining 19 Democrats to approve the bill, 21-16. Democrat Joseph Coniglio, a freshman senator from Bergen County, abstained.
