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Assembly Budget Committee Vice Chair Says Christie’s Tax Cut Would Come from Borrowed Money

6-27-12

With the June 30 deadline for an approved state budget days away, Gov. Chris Christie is publicly criticizing Democrats for not immediately including a tax cut for residents and Democrats are defending their proposal as being fiscally responsible. Assembly Deputy Speaker and Vice Chair of the Budget Committee Gary Schaer told NJ Today Managing Editor Mike Schneider that the governor’s rhetoric is unfortunate, but he’s hoping Christie will sign the budget put forth, making the compromise.

Schaer said Christie’s rhetoric against the Democrats is unfortunate because it doesn’t get anything accomplished. “I think that this is a time when we need adults in the room, sitting together in serious discourse. I don’t know if much of the inflammatory language brings us to that,” Schaer said. “The governor had spoken and has spoken about the need to compromise. I think the Democratic proposal in terms of the budget is just that — a compromise of his thoughts as well as some of ours. But one way or the other I think that adult conversation is what’s required, not epithets, not stones being thrown.”

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Democrats and Republicans are “extraordinarily close” to a compromise, according to Schaer. He said he believes the only holdup for Republicans is when the tax break will occur. “The governor wants it to occur immediately,” Schaer said. “Democrats like myself believe that we need to wait until December/January to ensure that the state’s economic numbers will come in as anticipated.”

Schaer does not anticipate Christie’s revenue projections will be accurate. He said the state treasurer estimates an $800 million shortfall and the non-partisan Office of Legislative Services says the shortfall is closer to $1.4 billion. The discrepancy has made Democrats worry the state can’t afford a tax cut.

“The people of New Jersey need a tax cut, we all agree,” Schaer said. “The question is what is the cost?”

He explained that the Democrats’ version of the budget is built upon Christie’s proposal with relatively minor changes. The changes amount to $100 million, which Schaer said is quite small when compared to the total $31.7 billion spending plan.

“I think that we need to show one [tax cut] but I think that we show one responsibly, one that’s fiscally prudent and fiscally responsible,” Schaer said. “It’s funny. I’m supposed to be a Democrat where we just want to spend money, but I find myself repeating the mantra of the Republicans back to themselves and suggesting to them that indeed prudence and responsibility is what is most necessary.”

Christie has accused Democrats of being too paternalistic, telling residents when they can get their own money back. Schaer said that assessment is unfortunate, wrong and unfair. Under the governor’s proposal, Schaer said a New Jersey family earning $50,000 per year would receive $80 back. He said waiting until January would be responsible. He also said residents should know the tax cut will come from borrowed money.

“I would suggest that $80 is not going to change anyone’s life,” Schaer said. “More importantly, I would suggest that people will be somewhat concerned when they find out the $80 or whatever amount they’re receiving back is borrowed money. So the $80 you receive is coming to you but you’re going to be charged interest for it.”

When asked if he thinks Christie will sign the proposed budget by the deadline, Schaer said, “We’ve given the governor every opportunity despite his rhetoric. I’m very, very hopeful that he will sign the budget and make the necessary compromise.”