N.J. tax and pension maneuvers have significance, analysts say

Once again, Democratic lawmakers in New Jersey have passed a measure to impose an income tax surcharge on millionaires.

They say the tax hike is needed to make the full state contributions to public workers pension funds.

Gov. Chris Christie said the state cannot afford to make the full payment as required by law. And he has every intention of vetoing the measure calling for an additional tax on the state’s wealthiest residents.

Still, according to political analysts, all of this does not add up to empty theater.

Democrats will help their relations with public employee unions by including the millionaires’ tax in the budget to fully fund pension obligations, said Rider University political science professor Ben Dworkin.

However, he said, that might not end up determining the outcome of next year’s legislative elections in potentially competitive districts.

“In those few districts, this will probably be a wash. The Republican will argue that no one should be raising taxes, and the Democrat will argue that the state can’t pass laws and then ignore them,” Dworkin said. “So each will have its own side, and then it will probably be decided about something else.”

While Democrats are not likely to capture any Republican seats next year because of the tax and pension battle, Monmouth University political analyst Patrick Murray said it may be enough to help Democratic candidates widen the margin of victory in their usual strongholds.

And having the millionaires tax in the budget Democratic lawmakers formulated may help the unions in their lawsuit challenging Christie’s reductions in the state pension contributions, Dworkin said.

“It gives the unions the opportunity to say there is another way of doing this. You raise all these taxes,” he said. “Whether or not that’s realistic politically is a second question.”

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