Christie Wants 10 Percent Income Tax Cut; Dems Wary

Democrats said the proposal is a boon for millionaires at the expense of schools.

By Beth DeFalco and Geoff Mulvihill
|  Tuesday, Jan 17, 2012  |  Updated 8:10 PM EDT
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Gov. Chris Christie on Tuesday said he would seek to reduce income tax rates by 10 percent for all New Jerseyans in an effort to send a message the state is a place to

NBC New York

Gov. Chris Christie on Tuesday said he would seek to reduce income tax rates by 10 percent for all New Jerseyans in an effort to send a message the state is a place to "plan your future," rather than flee. Brian Thompson reports.

Gov. Chris Christie on Tuesday said he would seek to reduce income tax rates by 10 percent for all New Jerseyans in an effort to send a message the state is a place to "plan your future," rather than flee.

Democrats who control the Legislature criticized the proposal as a boon for millionaires at the expense of schools.

The first-term Republican governor did not say in his third State of the State speech how he would pay for the income tax cut.

"This will send a loud signal to New Jerseyans and would-be New Jerseyans, to families here now and families who have left, to businesses and job creators thinking of coming here and those who have struggled to stay: New Jersey is once again a place to plan your future, raise your family, grow your business and someday retire," the governor told a joint session of the Legislature.

State Sen. President Stephen Sweeney, a Democrat, called the proposal "a windfall for millionaires at the expense of schools."

"It was a very good speech, but that's all it was — a speech," he said.

A family with a taxable income of $600,000 would save around $4,000 under the plan. A family with taxable income of $50,000 would save under $150.

In his address, Christie said that his fiscal discipline over the last two years has worked. He proclaimed "the New Jersey comeback has begun," repeating a familiar slogan of his administration.

The state has added private-sector jobs while keeping a lid on government costs, he said.

He listed his next priority as bolstering low-performing schools through measures he's long proposed, such as changing the tenure system and introducing merit pay for educators. His third priority for the year, he said, is to crack down on violence in cities through steps like overhauling the bail system to keep suspects who have histories of violence in custody as they await trial on new charges.

High-income families would get the biggest boost from his proposed tax cut. Families making more than $500,000 now pay just under 9 percent of their incomes in state taxes. Under Christie's plan, the highest rate would drop to just over 8 percent, meaning that the annual state income tax paid by a family with $600,000 in taxable income would drop from about $39,000 to around $35,000, according to an AP analysis.

A family making $50,000 would see its tax bill fall from about $1,270 to around $1,140.

Christie also said he wants to restore the earned income tax credit for the state's working poor. That credit was cut two years ago amid a fiscal crisis.

Christie said that after New Jersey residents shared the sacrifice during the depths of the recession, they should share in benefits now that the economy is improving. The tax changes, he said, would do just that — and he said they move in the opposite direction from states such as New York, Illinois and California, where there are proposals to raise some taxes.

Christie did not lay out exactly how he would pay for the cuts. He's scheduled to give his full budget proposal to lawmakers in about a month.

While Christie's profile has risen within the national Republican Party due to his blunt style and ability to work with Democrats, finding cooperative Democrats over the next two years in office will be more challenging as they begin moving into position to challenge Christie for the governor's office in 2013.

Christie was also moving into campaign position Tuesday, releasing a highlight reel video titled "Governor Chris Christie: The Jersey Comeback Has Begun." He planned to follow that up with two town hall events this week in Voorhees and Irvington.

New lawmakers also were sworn in Tuesday in the second such ceremony in as many weeks, and the governor started taking action on more than 100 bills sent to his desk that were left over from the most recent session. He signed laws giving towns the option to move school elections from April to November and to allow wineries to ship directly to customers.

Lawmakers also spent more time Tuesday paying homage to the late Assemblyman Alex DeCroce, the Republican minority leader who died Jan. 9, the last day of the legislative session. Assembly Republicans elevated Jon Bramnick of Westfield into the post.

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