New Jersey State Senate Passes Democrats' $35.3 Billion Budget

Budget Could Face Christie's Line-Item Veto

The New Jersey Senate passed a $35.3 billion budget that includes a surcharge on business and high-wage earners and a $3.1 billion payment for the state's public pension Thursday before the Assembly planned to vote on the same spending blueprint.

If passed, the budget would go to Gov. Chris Christie, who is expected to use his line-item veto to cut out the tax hikes and send a $33.8 billion budget bill on its way to becoming law, days before he announces a run for the Republican nomination for president.

Christie will make an official announcement Tuesday, two people familiar with his plans told The Associated Press. They spoke to The Associated Press on Thursday on condition of anonymity because they were not authorized to pre-empt Christie's announcement.

The budget measure advanced Thursday by a vote in the Senate of 24-16; the debate surrounding it fell along party lines. Republican senators argued the budget would drive business out of the state and did not truly solve the state's pension funding problem. They called on Democrats to sit down with Christie to redraft a pension solution.

Democrats said their budget fulfilled a promise to state workers made in a 2011 law that set pension payments.

"No one wants to raise any surcharge but we have an obligation," said state Sen. Paul Sarlo.

Since February, Christie and lawmakers have sparred over funding the pension fund according to a formula created by the 2011 law. But earlier this month, the state Supreme Court sided with Christie, concluding the governor and Legislature must work out the payment through the budget.

Christie proposed his budget in February. Democrats greeted it with skepticism and immediately a struggle over funding the state's $80 billion public pension erupted.

The Supreme Court's ruling bolstered the prospects that Christie's 2016 spending blueprint would become law because the court did not require him to make an additional payment of nearly $1.6 billion. Christie's administration had argued it would be next to impossible to make such a payment for fiscal 2015 so late in the year, which ends June 30.

With that hurdle cleared and his line-item veto powers, Christie was almost assured his spending priorities could bypass a hostile Democratic Legislature.

But that did not stop Democrats from adding a tax on income over $1 million as well as a 15 percent surcharge on the corporate business tax to close the gap and make the $3.1 billion payment required by the 2011 law, which Christie had signed.

Aside from differences over pension payments, the proposed budget for the 2016 fiscal year, which begins July 1, is largely similar to the budgets of previous years, lawmakers and experts say.

Funding to the state's nearly 600 school districts was kept flat and taxes are not expected to go up. But in a departure from previous years, the administration and Legislature's estimates on revenue are mostly aligned.  

Copyright AP - Associated Press
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