Christie convenes special session on tax-relief plan

Posted: July 03, 2012

TRENTON - Gov. Christie called lawmakers back from summer vacation Monday to urge them to pass a property-tax relief measure that his office didn't deliver to them until after the special session had ended.

Christie, who is presumed to be on the short list for GOP vice presidential candidate, said calling an emergency legislative meeting had nothing to do with "polls or conventions or speeches or TV sound bites."

But an ABC News TV crew followed the governor, sitting him down for a one-on-one interview after peppering the Senate president with questions about Christie's national ambitions.

The governor also is scheduled for multiple national television appearances Tuesday morning, making his speech appear to critics more like a launching pad for another trip on the media circuit than an urgent appeal to state legislators to act.

"This is a YouTube moment, that's all this was," said Sen. President Stephen Sweeney (D., Gloucester). "If we passed this property-tax cut three months ago . . . it wouldn't take place until next year. So the urgency and emergency . . . this is theater."

Even if they had wanted to, lawmakers couldn't immediately act on the bill because Christie's office sent it out after the session.

And none of the tax cut plans bandied about in Trenton this spring would provide any tax relief until 2013. Lawmakers have until the end of the legislative session, in January 2014, to deal with Christie's bill. Sweeney said they don't intend to take up tax cuts again until autumn, at the earliest.

The governor has the authority to call lawmakers to Trenton to listen to him, but he does not have the power to force them to hold hearings or act on bills. It was not immediately clear why the measure was delivered belatedly to the lawmakers.

Christie praised the Democratic-led Legislature for working with him this year to pass a reorganization of the higher education system, a bill to reform teacher tenure, and a plan to mandate drug treatment for nonviolent offenders with addiction.

"But there is one greater thing left to do - lock in tax relief today that will help to create new jobs tomorrow," he said.

Christie, who originally had called for a 10 percent income tax cut to be phased in over three years, said he was choosing instead to resurrect a deal he had reached with Sweeney behind closed doors in the spring.

That plan, which fell apart over revenue concerns among Democrats, would have offered income-tax rebates equal to 10 percent of residents' annual property-tax bills. Those who make $400,000 or less would have been eligible for the credit.

It also would have immediately restored the state Earned Income Tax Credit - a benefit that low and middle wage earners can claim on their income taxes - to its 2010 level. Christie had decreased the credit that year to balance the budget.

The deal broke down after state tax collections came up short in the spring, making Democrats nervous about approving a tax cut that would cost more than $1 billion after it was fully implemented over the next four years.

Meanwhile, Assembly Democrats pushed ahead with a separate property tax cut to be paid for by a tax increase on those who make $1 million or more, a measure Christie has vetoed twice before.

Christie used the so-called millionaires' tax as a propaganda weapon in town hall meetings, telling crowds that Democrats wanted to raise taxes while he was trying to lower them.

On Monday, he used the tax as a legislative weapon. Using a conditional veto that allows him to essentially rewrite bills, he transformed the millionaire's tax into the property tax-cut plan he and Sweeney had hashed out months before.

During the speech, Sweeney smirked as he sat behind the governor; he even laughed a few times. Assembly Speaker Sheila Oliver (D., Essex) listened impassively.

The GOP side of the joint session, meeting in the Assembly chamber, gave Christie several standing ovations. Democrats offered polite applause. The one exception was State Sen. Jeff Van Drew (D., Cape May) who applauded vigorously.

"I think he's right on," Van Drew said after the speech. "The people of this state have been taxed, tolled . . . and fee'd to death."

Van Drew had supported the compromise Sweeney-Christie tax cut.

Christie prodded lawmakers to approve tax relief. "What are we waiting for?" he asked.

Democratic leaders said they were waiting for fiscal security.

The 2012 budget year that ended Saturday came up short on revenues, leading lawmakers to tap the clean energy fund and other one-shot revenue sources to balance the budget.

Anticipating a Christie veto of the millionaires' tax, Democrats also set aside $183 million for property tax relief for fiscal year 2013, which began Sunday. But they won't pass a bill to trigger the tax cut until the state economy improves.

"We passed the budget with the money in it and we are anxious to provide that relief," Sweeney said. "But what we can't deal with is if the numbers come in and we're a billion dollars . . . in the hole. How do we justify that, giving a tax cut when we might be a billion in the hole?"

Christie based his budget on a 7.2 percent revenue growth rate projection, far and away the most aggressive in the nation for this fiscal year.

Credit rating agencies have cast doubt on the projection and said New Jersey's economy will grow more slowly than the national average. The agencies also have criticized Christie for not having a sufficient surplus built into his budget.

Before signing the fiscal 2013 budget on Friday, Christie doubled the surplus to $648 million in part by siphoning money from funds for legal services to the poor, transitional aid to struggling cities such as Camden, and other programs.

"Can't we afford to send just one-third of that surplus back to our citizens and to give them that guarantee today?" he said. "I say yes. We have the money available to fund a tax cut that gives relief to middle-class New Jerseyans."

Democrats disagreed.

"We all run for office, we all would love to provide a tax cut," Sweeney said. "We have to make sure the money's going to be there."

After the session, Assembly Democrats excoriated Christie for vetoing several bills that would have provided property-tax relief, including the return of utility fees to municipalities, an increase in school aid, and an increase in the Earned Income Tax Credit.

"Time and time again, Gov. Christie has failed when it comes to tax relief," said Assembly Majority Leader Louis Greenwald (D., Camden).

Of the special session, Greenwald added, "The governor will move from 30-second bite to 30-second sound bite because he needs the media attention like you and I need oxygen."

If Assembly Democrats hadn't pushed a millionaires' tax, Christie couldn't have used the bill for a high-profile tax-cut speech during a special session.

But Oliver said proposing it wasn't a tactical mistake; the Assembly carried out the will of the people, she said.

"The residents of this state overwhelmingly expressed to this legislature that they believe those who earn one million or more are more positioned to carry a tax burden than they are," she said.

The millionaires' tax would have increased income taxes on about 16,000 residents, Greenwald said.

"The only consistency Gov. Christie shows is protecting the mega-rich and wealthy," he said.

Contact Joelle Farrell at 856-779-3237, or @joellefarrell on Twitter.

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