By Michael Aron
Chief Political Correspondent
“We’re in a crisis right now,” said Senate President Steve Sweeney.
Senate Democratic leaders Sweeney and Loretta Weinberg announced they want to fully fund New Jersey’s pension system.
To do so, they are willing to hike the income tax on high earners and on business until the state economy improves.
Under Sweeney’s proposal, the top tax rate on income over a million dollars would rise from 8.97 percent to 10.75.
On income between $500,000 and $1 million, the top rate would rise to 10.25.
And corporate taxpayers would be asked to pay a temporary 15 percent surcharge.
Add in some technical changes and the additional revenue adds up to $1.6 billion, which is exactly what Gov. Chris Christie wants to take out of the pension contribution in next year’s budget.
“See, he said there was no Plan B because he didn’t look. He didn’t even attempt to find a way,” said Sweeney. “He says, ‘I can’t do it, I can’t find a way to fund it.’ Yes you can. It wasn’t that hard to find.”
The governor already cut $800 million from the current year pension contribution.
There is nothing the legislature can do about that.
But Sweeney says he and Christie committed to public employees three years ago that the pension system would not get hit up again.
“No one wants to raise taxes. I don’t care if it’s a millionaire’s tax, any kind of tax. No one likes raising taxes. But I gotta tell you, I don’t like breaking my word,” Sweeney said.
Earlier today, the Public Employees Retirement System board of trustees voted to join public employee unions in a lawsuit against the governor.
Judge Mary Jacobson will hold a hearing on that suit one week from today.
The unions hope they win there, because the governor is likely to veto Sweeney’s proposed alternative.
“I think that if what the governor wants to do is veto a good budget that includes a full payment and in doing so we believe he’d break the law, that that would be on the governor,” said Seth Hahn, legislative and political director for CWA New Jersey.
The unions were cheered that the pension board sees the issue their way.
“These folks have worked their entire lives for this benefit, and they’re expecting it to be there when they retire,” said Eric Richard, AFL-CIO legislative affairs director.
Burlington County Republican Chairman Bill Layton, a Christie ally, disagrees.
“We have more New Jerseyans than just people who are public employees. And if you’re gonna take care of everyone and do the right thing — educating people, making sure our kids are being educated properly and money’s there for that, making sure that seniors are protected — are critical to the state of New Jersey,” Layton said.
Some observers say Christie won’t raise taxes because he’s running for president.
Others say Sweeney is protecting the unions because he’s running for governor.
“And someone says is this about running for office? It has absolutely nothing to do with running for office. What it has to do is, I made a commitment to get these pensions back in health. And he broke it,” Sweeney said.
The next two weeks should be interesting.