Quigley: The bully, the backlash and the budget

prieto.JPGView full sizeAssembly Budget Chairman Vincent Prieto

Maybe Chris Christie simply went too far last week when he called Democrats vampires and junkies, saying he thought he'd already driven a wooden stake through their hearts and claiming they were going through withdrawal "down on the ground, sweating, twitching" because they weren't raising taxes. Maybe Democrats' anger at his constant taunts and threats had just built to a crescendo.

Whatever the reason, Senate and Assembly Democrats finally got together and decided to stand up to the governor and tell him "put your money where your mouth is." If he really believes the state can afford a tax cut now, he will have to prove it.

To show they are acting "responsibly," the majority budget is $62 million lower than the governor's proposal. It leaves $300 million in the surplus account and sets aside $183 million for phase one of a tax cut. (More about that later.)

The proposal includes $50 million to restore the full Earned Income Tax Credit, gives $25 million to nursing homes and another $25 million to other health and social programs. There will be $10 million for educational assistance and day care for low-income families. And it includes a larger share of energy tax receipts for municipalities.

Money for the add-ons will come from a new tax on millionaires -- if the governor doesn't veto that. To be clear, the way that tax is structured means people who earn more than a million dollars a year will pay a higher tax rate only on the amount above a million. Taxes on income less than a million annually won't be affected.

Now about that tax cut. Despite the governor's insistence that New Jersey is experiencing a "comeback," Assembly Budget Chair Vincent Prieto notes tax revenues have been significantly below projections for several months and no one outside the Front Office believes they'll escalate any time soon.

So the Democrat-proposed budget sets aside money for a tax cut, but legislators will not vote on a second bill needed to actually enact that cut. They'll hold that legislation till December. If the governor's predictions come true and money flows into the Treasury, taxes will be cut before the April filing deadline. If the analysts' projections are accurate and there's no money, there'll be no tax cut of any kind this year.

The governor says he can hardly wait to veto a millionaire's tax again and that he won't sign a budget without a tax cut. He's saying Democrats are denying people tax relief. Democrats are saying "show us the money and there'll be tax cuts for all."
So a showdown is coming. Four days to go.

Democrats giving the governor a budget with the tax cut wording he demands puts him in a spot. If he vetoes it, there's no way government can continue to operate after June 30. If he signs it, there'll be a tax cut only if revenues climb. Christie can line-item veto the millionaire's tax and he can cut out funding for programs he doesn't like, but under our state Constitution, he cannot add or actually change anything in the budget the Legislature votes for. Veto, yes. Delete, yes. Add or amend, no.

He told Cabinet members to prepare for a government shutdown at midnight on June 30 and he skipped a party at a Utah resort with Mitt Romney and big donors last weekend because negotiations were going down to the wire and could fail altogether or force him to renege on some promises.

The "vampires" and the "junkies" are calling his bluff.