Additionally, the Governor took action rejecting job-killing tax increases and signed into law additional targeted tax cuts for small business and job creators.
“It is my solemn pact with the residents and taxpayers of New Jersey to never allow a return to the kind of reckless, autopilot spending that devastated our state’s economic health in years past and which was embodied in the budget I repaired, a relic of days when there was no concern for the state’s fiscal reality,” Governor Chris Christie said. “Let me be clear – New Jersey is only going to spend the money we have. We are not going to revert back to business as usual and undo all the progress that has been made to improve New Jersey’s long-term fiscal health. The actions I have taken today reinforce a commitment to protecting taxpayer dollars, safeguarding critical priorities like education, and rejecting tax increases that impede economic expansion and job creation.
“This budget is not only constitutionally balanced, but represents my commitment to education. This year’s budget managed to increase funding by $850 million and does so in a fiscally prudent budget. New Jersey continues to spend more money per pupil than any other state and now is the time to complement the dollars spent with real education reform. Now is the time to turn our focus and energy to tackling the next big thing for our state – education reform,” concluded Governor Christie.
The Governor’s remedies, a combination of the line-item veto on the appropriations bill and the absolute veto, ensure the state will go into the next fiscal year with a constitutionally balanced budget, puts New Jersey on stronger fiscal footing and funds key commitments:
· Governor Christie’s adjusted budget spends $29.7 billion, $900 million less than the Democratic budget and maintains a healthy and necessary surplus;
· Increases state aid to school districts by $850 million over last year. This commitment to education includes the Governor’s initial $250 million increase for all school districts, meeting the Supreme Court’s mandate by providing an additional $450 million to the Abbott districts, and an additional $150 million for non-Abbott districts;
· Doubles the Homestead Benefit to provide property tax relief for New Jersey families;
· Increases and secures funding for New Jersey hospitals by $20 million;
· Provides full funding for healthcare to low-income earners and the uninsured through Federally Qualified Health Centers;
· Provides $180 million in targeted tax cuts and incentives to grow the economy and create jobs;
· Fulfills New Jersey’s commitment to make the state’s pension fund payment;
· Doesn’t raise taxes on individuals and job creators at a time when New Jerseyans are already subject to one of the highest state income tax rates in the nation and New York is reducing its tax burden; and
· Preserves critical spending for senior and disabled prescription aid.
In addition to returning a responsible and balanced budget to the Legislature, Governor Christie took other action today to stop job-killing tax increases and create a competitive climate for economic growth. Governor Christie vetoed Assembly Bill 4202, a Democratic proposal that would raise taxes on individuals and businesses at a time when New Jerseyans are already subject to one of the highest state income tax rates in the nation. The proposed income tax hike would directly hurt small business and exacerbate the volatility of New Jersey’s revenue base, considering that 71 percent of the taxpayers who pay the top tax rate under this legislation report income from business activity, and nearly 42 percent of the revenue subject to this tax increase represents business income.
The Governor signed into law today two additional pro-growth tax cuts that were part of his budget proposal that will eliminate the cap on the corporation business tax research credit and decrease the minimum corporation business tax on S-corps by 25 percent. Previously, on April 28, Governor Christie signed two tax cuts that he had initially proposed, the single-sales tax factor and net-loss carry forward. In addition, as initially proposed by Governor Christie, the Transition Energy Facility Assessment will phase out over the next three years, reducing energy costs for New Jersey families and businesses. In total, these pro-growth measures provide $180 million in targeted tax relief for New Jersey businesses and entrepreneurs.
The Governor also vetoed Assembly bill A-4204 in a fiscally responsible move that allows the State to continue to provide the Earned Income Tax Credit (EITC) at a level that the State’s taxpayers can sustain. While a difficult decision, providing the State EITC at 25 percent of the federal EITC is not affordable and not sustainable, which is why the Legislature passed and the Governor signed into law last year legislation to make the State EITC equal to 20 percent of the federal EITC. He also absolutely vetoed the Democrat’s supplemental spending bill, A-4203, which was unconstitutional because it provided educational spending outside of the budget appropriations act.