Gov. Chris Christie picked up support from the business community today in renewing his push for a 10 percent tax cut to the income tax, a move that was considered dormant at best when optimistic revenue targets fell far short of expectations early in the fiscal year.
Christie conditionally vetoed a bill to restore the cut in the earned income tax cut, which benefits the working poor, saying he would sign the bill if it provides an income tax credit for homeowners equal to 10 percent of their property taxes. The tax cut would be phased in over four years for households earning up to $400,000.
Michael Egenton, senior vice president of government relations at the New Jersey Chamber of Commerce, said his group has long been a supporter of the tax cut, and "commend(s) the governor for re-engaging the plan for the tax cut. We feel that for those that are job providers, it would be an extra added boost to the economy and growing jobs."
"I always believe that a tax cut has an effect on businesses as they assess New Jersey's business climate, whether it's current businesses that are here looking to hire employees or expand their facilities, or if you're talking about attracting businesses from outside the state," Egenton added.
Phil Kirschner, president of the New Jersey Business & Industry Association, also was pleased to hear the idea getting discussed again.
"We have said all along that the best thing you can do for the economy is just have lower tax rates across the board for everyone," he said. "If you look at the successful states in the country, they have low tax rates."
He said the state income tax "is still one of the highest in the country," and increasing the earned income tax credit, in combination with this cut, "will give money to everybody to invest and to spend."
Meanwhile, Laurie Ehlbeck, New Jersey state director for the National Federation of Independent Business, said her group was "very encouraged that the governor hasn't given up on real tax relief."
Under Christie's proposal, the tax cut would take effect but the Legislature could suspend it in future year if tax revenue falls short.
"There's no longer any reason that both sides can't come together and provide tax relief to working poor residents and middle-class homeowners who are struggling with the highest property taxes in the country," Ehlbeck said. "The idea that legislators are elected to put the financial interest of government first is nonsense. They're elected by taxpayers mostly from the private sector who work hard for their money and who deserve to keep more of it."
The plan got a predictable reaction from legislative Democrats. Senate President Stephen Sweeney (D-West Deptford) said "in my mind, nothing has changed since I was part of passing the budget last June."
In June, the Democrats put $193 million in the budget for a tax cut, but said they would only consider the measure if Christie's revenue projections — which Democrats said were too lofty — came to fruition.
"Up to this point the revenues have not worked out, but we have been monitoring the budget month to month, and based on how we come out at the end of the year," Sweeney said, "that's when we'll make a decision."Contributing: Jared Kaltwasser