| NEW YORK, June 18
NEW YORK, June 18 Leaders of New Jersey's
Democrat-run Senate on Wednesday proposed hiking taxes on the
wealthy and on corporations, a counterstrike to Republican
Governor Chris Christie's plan to slash state pension
contributions for two years.
Lawmakers have just two weeks to craft a balanced state
budget for fiscal 2015, which begins on July 1. Christie, who
came into office pushing tax cuts, has said he will not consider
raising taxes and has shot down Democrats' previous attempts to
That leaves little wiggle room to close the $2.75 billion
revenue shortfall through the end of fiscal 2015, which the
Christie administration revealed on May 20.
Christie favors cutting the state's contribution to its
retirement system for public employees in 2015 to $681 million
from $2.25 billion, despite a 2011 pension reform law that calls
for the higher contribution level.
Unions have sued over Christie's reduction of the state's
2014 contribution, which he did by executive order. The unions
say the reduction violated the contractual rights of pension
plan participants protected by the 2011 law.
The Christie administration responded on Wednesday, saying
the court has no right to interfere in executive branch
functions, including decisions on spending, debt and budgets.
The Democrats' proposal, from New Jersey Senate President
Stephen Sweeney, would require the state to make its full
"Abandoning the promise will cost more in higher interest
rates and lower credit ratings," Sweeney said in a statement.
The Senate's proposal calls for a 10.75 percent tax on
millionaires, which Sweeney said would raise $565 million.
Another 10.25 percent tax on those earning between $500,000 and
$1 million per year could generate another $155 million for the
Among other measures, the plan would also raise $375 million
from a 15 percent surcharge on corporations and $175 million
from suspending a business grant program for one year.
Altogether, the proposal would generate about $1.57 billion,
Assembly Speaker Vincent Prieto said in a statement that the
Assembly will review the Senate's plan and that "everything is
on the table."
Republican State Senator Joe Kyrillos railed against the
"People who pay the vast majority of taxes to fund public
services will leave this state if you try to make them pay
more," he said in a statement.
(Reporting by Hilary Russ; Editing by Dan Grebler)