Gov. Chris Christie's move to veto $361 million from the state's $31.7 billion budget drew immediate praise from business advocates on Friday evening.
The line-item vetoes by the governor trimmed spending across a range of services, including medical services in nursing homes. Christie preserved $347.5 million in business tax cuts, including an additional $163.5 million in cuts on top of the $184 million in the fiscal year ending on Saturday.
"It's a pro-business budget; continues the governor's quest of job creation and creating a better economic climate; and doesn't raise taxes," said Michael Egenton, senior vice president for the New Jersey Chamber of Commerce. He noted that the budget is similar to the one Christie initially proposed.
Christie also is expected to veto the upper-income, or millionaire's, tax passed by the Legislature. He instead favors enacting a tax cut immediately, rather than waiting to see if the state meets his administration's revenue projections.
"The budget the Legislature sent me violated two core priorities of this Administration – it denied tax relief to our hard-working, middle-class families while proposing an $800 million tax increase, and rejected fiscal responsibility by including millions in new spending that threatened to undo the hard-won progress of the last two years," Christie said in the statement announcing the line-item vetoes.
Egenton said he anticipates the Legislature returning to two issues opposed by business groups – an increase in the minimum wage and a move to block state officials from issuing waivers of some regulations.
David Brogan, first vice president of the New Jersey Business & Industry Association, said Christie's line-item vetoes were prudent, particularly the decision to make cuts without affecting the business tax cuts.
These cuts include increasing the ability of business owners to offset their personal income taxes with business losses; phasing in the switch to basing the corporation business tax on a single sales factor; and phasing out the Transitional Energy Facility Assessment.
"We continue to support the governor's 10-percent across the board tax proposal," Brogan said, referring to Christie's proposal to cut income taxes. "We'll have to see what happens over the summer and into next year."
Brogan also said he was encouraged by Christie's criticism of the income tax.
"As I've said in the past, that consistency from the governor with regard to taxes that impact the business community, instills essential confidence," Brogan said, adding that this will lead to business investment and expansion.
Senate Budget & Appropriations Committee Chairman Paul A. Sarlo (D-Bergen) criticized the vetoes, saying in a statement that "with his signature today, the governor takes full ownership of his revenue projections."
Sarlo said Christie's push for a tax cut before the state knows whether it is meeting revenue targets "is a platform built on national campaign rhetoric rather than fiscal reality. Let's be perfectly clear: we all want to cut taxes. But first we absolutely need to be fiscally responsible."
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