TAX NEWS - June 2010

New Jersey Tax: NJ `millionaires tax' headed for override vote

The New Jersey Assembly will vote Monday on whether to override Gov. Chris Christie's veto of a tax on millionaires.

Seven Republicans would have to join the 47 Democrats in the Assembly for the override to succeed. Two-thirds of the Senate, including four Republicans, also would have to approve the override.

The Legislature sent Christie a bill last month raising the income tax rate for residents who earn more than $1 million a year. Christie vetoed it.

The tax would raise an estimated $637 million by adding an income tax surcharge of nearly 2 percent on about 16,000 residents. The money would be used to restore property tax rebates for 600,000 senior citizens and disabled residents.

Assembly Speaker Sheila Oliver and Majority Leader Joe Cryan, both Democrats, said Tuesday they are giving Republicans another chance to choose between seniors and millionaires.

Assembly GOP leader Alex DeCroce said the tax would kill jobs and drive residents away.

Christie's $29.3 billion budget makes sweeping cuts to social services, programs and public education.

Democrats sought to blunt some of the cuts by extending the surcharge that expired in December for another year. Christie has refused to raise the tax, even temporarily.

"Nothing is more important to Democrats than protecting our most vulnerable senior citizens who are struggling to pay their property taxes and keep their homes," said Oliver, who represents Essex and Passaic counties. "I'm hopeful (Republicans) can show some independence from their governor and join what should be a shared value."

The override vote is expected to be strictly partisan, with all 47 Assembly Democrats voting for it and all 33 Republicans against.

The original bills passed the Assembly 46-32.

Christie spokesman Michael Drewniak said the vote will force Democrats to go on record twice in three weeks voting to raise taxes. Democrats argue the opposite -- that the vote puts Republicans on record twice giving preferential treatment to the wealthy.

"When they imposed this tax last year, it was supposed to be a one-year, one-time tax," Drewniak said. "They are nothing if not persistent when it comes to taxes and spending."

On Tuesday, Senate President Steve Sweeney said he was ready to post the measure immediately if the Assembly approves it. Any legislation that raises revenue must originate in the Assembly.