UPDATE 1-NJ $32 bln budget plan includes no tax hikes
(Adds details, reaction)
By Joan Gralla
Feb 21 (Reuters) - New Jersey Governor Chris Christie on Tuesday proposed a $32.1 billion budget for fiscal year 2013, which avoids tax increases and doubles the state's pension contribution to $1.1 billion.
The Republican governor's plan for the budget year beginning July 1 includes a 10 percent cut in all income tax brackets, which he first promised in his State of the State address on Jan. 17.
Christie said New Jersey can lead the nation in fiscal discipline and "be the trendsetter for an America that honestly wants to confront our challenges."
The plan, if approved by the Democratic-controlled legislature, would raise school funding by $213 million to a total of $8.8 billion, increase aid for colleges and universities by over $100 million and give hospitals $986 million.
Christie said his budget plan would spend less than the state did in 2008, the last year of Democratic Governor Jon Corzine's four-year term.
Christie has criticized a court ruling obliging the state to boost funding for poor schools, but he said: "It's not enough and it's not appropriate, to simply tell our most challenged urban families, trapped in over 200 failing schools, that "'life's not fair.'"
His proposals include a new $1 million scholarship program for inner-city pupils, and a $28 million increase in student financial assistance. Christie again urged lawmakers to weaken teacher tenure while boosting their pay and allowing more charter schools to open in areas with failing schools.
After Christie spoke, Democratic lawmakers blasted his proposed income tax cut, saying it would give a middle-class family $80 over the next three years while the state's 16,000 millionaires would reap more than $7,000.
"The governor's budget plan is just more of the same - tax cuts for the rich at the expense of the middle-class," Assembly Majority Leader Lou Greenwald said in a statement.
New Jersey's property taxes are among the nation's highest and the Democrats said lowering them for middle-class homeowners was more important than Christie's income tax cut.
"The most glaring omission in his speech was the complete and utter absence of a plan to address property taxes," Speaker Sheila Oliver said.
Christie's new budget is based on a 7.3 percent increase in revenue from the latest revised forecasts for the current year, the New Jersey Department of the Treasury said. In the first six months of fiscal 2012, tax revenue missed forecasts by 3.2 percent.
Christie said the state's economy has added 60,000 jobs since 2009.
Christie's tax relief proposals include increasing the earned income tax credit to 25 percent from 20 percent over two years to give the working poor $550 a year.
The governor is seen by political analysts as a possible pick for a vice presidential candidate after he said he would not run for president. The analysts view Christie's budget as designed to win voters if he runs for re-election as governor in 2013. (Reporting by Joan Gralla; Editing by Kenneth Barry)
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