Today is the deadline for Gov. Chris Christie to take action on the $34.1 billion state budget the state Legislature sent him Thursday, and lawmakers are bracing for what could be a series of vetoes.
The governor has pledged to redline a package of tax hikes designed by Democrats and opposed by Republicans and business lobbyists. The likely targets are a bill to raise the income tax for any earnings above $1 million during three years, and another bill that imposes a 15 percent corporate-tax surcharge for a year.
But the vetoes may not end there. Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto included a $2.25 billion payment to public workers' pension funds in the new budget, as required by a law Christie signed in 2010 to stabilize the deeply troubled retirement system over 30 years.
Christie says now that, due to slower-than-expected economic growth and missed revenue projections by his Treasury Department, the state can't afford such a big pension contribution. With his line-item veto, Christie could slash next year's pension payment from $2.25 billion to $681 million, as he has planned, though that move would spark a tough court battle for the Republican governor.
Sweeney said on the Senate floor last week that Christie can't renege on his own plan to ramp up funding for the pension system, which faces nearly $40 billion in unfunded liabilities. Another law Christie signed in 2011 imposed higher benefit costs and a higher retirement age on public workers, but in exchange, it also gave them a right to bigger and bigger pension payments by the state every year.
"That came with an obligation, damn it," said Sweeney.
"I wish nothing but the best for the wealthy," he continued. "But enough's enough. What about the working-class people that were made a promise? What about damn fairness?"
Christie's lawyers last week won the first round of an ongoing court battle over the budget, with a judge allowing Christie to cut $887 million from a pension contribution that had been scheduled for the fiscal year that ends today. But Superior Court Judge Mary Jacobson is likely to review the new budget, too, and could order the state to make a higher pension payment than $681 million.
"For our state’s families who are already overburdened by high taxes, raising taxes even further would not solve a problem created by decades of neglect and irresponsibility," Christie said last week.
The spending plan by Prieto (D-Hudson) and Sweeney (D-Gloucester) also includes funding for women's health centers, a tax credit for the working poor, cancer research funding, legal services for the poor, and other areas that Christie has cut funds for over the years. Those, too, could get vetoed out.
There are two big things the governor can't do with his veto power: He can't reverse a one-year freeze imposed by Democrats on the Business Employment Incentive Program of tax breaks, and he can't impose a new tax on electronic cigarettes. The governor put that tax in his budget proposal earlier this year, but in a rare moment of bipartisanship, Democrats and Republicans chucked it.
