ANGELA DELLI SANTI,Associated Press
GEOFF MULVIHILL,Associated Press
TRENTON, N.J. (AP) — The Democratic-controlled Legislature passed a $32 billion state budget on party line votes Monday, sending the spending plan to Republican Gov. Chris Christie to see which parts he will keep and which he'll veto.
Spending in the budget adopted by lawmakers is mostly the same as what Christie proposed. But there's one difference that's sure to prompt a stare-down, if not one or more line item vetoes from the governor: Christie wants to begin in January to phase in a 10 percent tax cut at a cost of $183 million this year. Democrats have insisted the cut should come to property tax bills rather than income taxes, a switch that would benefit lower-income and middle-class homeowners and a plan Christie has all but said he would cede to.
But the bigger dispute is that the Democrats say the revenue projections Christie is relying on are overly optimistic. They want to hold the $183 million for a tax cut in escrow until January, when they would pass a separate law to authorize the cut — or not, if they felt revenue didn't support it.
Christie said tax relief for families is long overdue and that's what he'll continue fighting for.
"I will not allow New Jersey to go back to the same failed policies that nearly put our state over a fiscal cliff," he said in a statement after the votes Monday.
He has warned residents that the Democrats would find an excuse to have the Legislature spend that money instead of having it sent back to taxpayers. He has threatened to use his veto pen on the budget to cut programs and services Democrats want to fund if the tax cut is not guaranteed to take effect in January. He has until the end of the week to act.
During Monday's Senate debate, Republicans defended the governor's stance that the state's economy is bouncing back and that the taxpayers deserve a tax cut after years of sacrifice.
"The sponsor was able to find $140 million in cuts to various line items so that the money could be redirected to legislators' priorities, but we're impounding just about the same amount of money for a tax cut because we're not sure we can afford it?" asked Sen. Anthony Bucco.
Assemblyman Gary Schaer, of Passaic, vice chairman of the budget panel, made the case for deferring the tax cut and cast doubts about how much the state's economy has recovered from a deep recession.
"I believe the people of New Jersey, more than they want a tax cut, want a fiscally responsible Legislature," he said.
Schaer reiterated the fiscal projections of the Legislature's budget expert, who estimated that revenue collections could be off from Christie administration estimates by as much as $1.4 billion through July 2013.
"What's the problem with 'Show me the money?'" he asked, evoking a popular line from the Tom Cruise and Cuba Gooding Jr. movie "Jerry Maguire."
Assemblyman Jay Webber, a Republican from Whippany, said the Democrats have the wrong approach.
"I think the budget gets its priorities wrong," he said. "With this budget, the Democrats are telling the people of New Jersey they have 31.7 billion things better to do than provide tax relief."
Democratic lawmakers added $25 million to funding for nursing homes and promised savings from a reduction in the size of the state government workforces, among other changes to Christie's proposed budget.
Also on Monday, lawmakers advanced other budget-related items.
Both houses approved allocating $7.5 million to fund women's health clinics.
The Assembly passed bills to increase income taxes on earnings over $1 million and use the revenue to fund property tax cuts; to extend an earned income tax credit benefiting the working poor and to send to town governments $66 million in utility tax revenues. The Senate is expected to take action on those bills on Thursday.
The Assembly passed a transportation bill proposed by Christie that authorizes the state to borrow $3.5 billion to pay for projects over the next four years. The debt payments for that would be $300 million per year. The Senate is also expected to weigh in on that on Thursday.
Follow Mulvihill at http://www.twitter.com/geoffmulvihill
Copyright 2012 The Associated Press.