Christie wants 10 percent income tax cut; Dems wary

Gov. Chris Christie delivers the State of the State address on January 17, 2012.

January 17, 2012 6:31:05 PM PST
New Jersey is making a comeback. Now come back!

That was the message Gov. Chris Christie tried to convey on Tuesday as proposed an across-the-board 10 percent income tax cut he said would help lure families back to the nation's most densely populated state.

"This will send a loud signal to New Jerseyans and would-be New Jerseyans. ... New Jersey is once again a place to plan your future, raise your family, grow your business and someday retire," the first-term Republican governor told a joint session of the Legislature.

The proposal, held tightly under wraps, appeared to be a surprise to Republicans and Democrats.

Democrats literally refused to stand for it as he received a raucous standing ovation from the half of the chamber where Republicans were seated.

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

Ironically, Democrats who support a progressive income tax plan because it more heavily taxes the rich who can more easily afford it, objected to the governor's flat tax cut for the same reason - wealthier residents would receive more money than poor ones.

Christie said that doing so was fair since the rich paid more in to begin with: "Everyone made the sacrifice. Everyone will share in the benefit," the governor said. He also said he wants to restore the earned income tax credit for the state's working poor - a credit that 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

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, which would cost an estimated $1 billion according to projected tax collections. Under Christie's plan, a couple with a taxable income of $600,000 would save around $4,000. A family with taxable income of $50,000 would save about $80 a year.

In his address, Christie said that his fiscal discipline over the last two years has worked - proclaiming a familiar slogan uttered by his administration: "the New Jersey comeback has begun."

As part of that, he cited the addition of private-sector jobs, the reduction of more than 375 government programs, a cap on the allowed annual increase in property taxes, and an overhaul of the state's pension and benefits programs.

In addition to an income tax cut, Christie set 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. He also called for mandating low-level, nonviolent drug offenders get treatment instead of prison.

Former Gov. Jim McGreevey, who had not appeared in the Assembly chamber since he resigned in 2004 after announcing he is a "gay American," attended the speech to hear what Christie would say about crime issues. McGreevey, who has attended seminary and counseled female prison inmates since he left office, called Christie's plan "gutsy."

Political watchers said the speech was targeted with an eye toward Christie's national reputation as he looks to cement his conservative credentials by cutting taxes and the size of government.

"This was about the governor's political future. It was about looking ahead to 2013 and beyond," said Monmouth University political science professor Patrick Murray.

"He threw Democrats a curve ball on the tax cut, challenged them on education, and extended an olive branch on drug courts."

While Christie's profile has risen within the national Republican Party due to his blunt style and ability to work with Democrats, cooperative Democrats in the Legislature may become more of an endangered species for Christie, 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.