He will spend half his life and most of his means in getting into Parliament and when at last he arrives there he will have no time to think of anything but how to get into your Majesty’s Cabinet. When he intrigues his way to the top of that, he will be a master of the party game and of nothing else.
And so it is with the Democratic leadership in the New Jersey legislature which today are going to come out with their budget plan for FY2016 which is supposed to include payment of $3.1 billion (5/7th of the ARC) into the retirement system instead of the $1.3 billion that Governor Christie arbitrarily decided to make along with this reported spin:
“We are committed to stabilizing the pension and funding the pension, and more importantly to working toward a long-term fix so it’s financially stable,” Assembly Majority Leader Lou Greenwald (D-Camden) said last week.
To do that, “everything is on the table,” state Senate Budget and Appropriations Committee Chairman Paul Sarlo (D-Bergen) added. Lawmakers said the details of the budget are still coming together, and that they’ve toyed with several options to make the full pension payment.
The largest state labor union, the Communications Workers of America, formulated and vowed to steer lawmakers toward its own funding plan, which includes increased taxes on income over $350,000, the business tax surcharge, freezing Christie’s small business tax cuts and closing corporate tax loopholes by enacting combined reporting.
Sweeney has already sponsored a bill that has support from Assembly Leader Vincent Prieto (D-Hudson) to hike taxes on people earning more than $1 million.
Sweeney’s millionaires’ tax bill would raise the tax rate on income over $1 million from 8.97 percent to 10.75 percent for four years, raising an estimated $675 million for the next budget. That bill would also increase the earned income tax credit for low-income workers from 20 percent of the federal credit to 25 percent.
But other aspects of CWA’s proposal, Assembly Budget Chairman Gary Schaer (D-Passaic) said last week, “are being looked upon very favorably by the leadership of the Assembly and Senate.”
The corporation business tax surcharge Democrats sent Christie last year would have raised another $390 million. That budget also suspended for a year the Business Employment Incentive Program, freeing up $175 million.
Business groups and Republican lawmakers have planned a news conference for Monday to criticize efforts to raise income taxes.
State Sen. Raymond Lesniak (D-Union) said Saturday he will introduce a bill that matches the final piece of CWA’s plan: to close corporate tax loopholes that allow some multi-state businesses to shuffle profits across state lines to avoid paying New Jersey taxes. However, it is not clear whether that will ultimately be a part of the Democrats’ budget strategy.
“It certainly should be,” Lesniak said. “Every $250 million helps.”
What is missing from these proposals and analyses:
- The real annual cost for the benefits the state is responsible for (both accruing and to amortize unfunded liabilities over 7 years) would be about $10 billion;
- Raising taxes in one year often means lower (or no) taxes on the entity taxed in future years (possibly in perpetuity) as those being taxed adjust accordingly;
- Any knowledge or appreciation of the real depth of the problem.
For them it’s all a party game.