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N.J. Gov. Christie Vetoes Tax Hike to Close Pension Funding Gap

As expected, New Jersey Gov. Chris Christie vetoed a tax increase intended to increase payments to the state’s pension plan, which is expected to be underfunded by $51 billion in 2018. Facing a shortage due to lower revenues but required by state law to balance the budget by July 1, Christie decided to lower pension contributions from the promised $2.25 billion to $681 million. Last week, a court refused to require Christie to make the larger contributions.

Two weeks ago, state Democrats floated the idea of a “millionaire’s tax” that would raise income tax rates for people making $350,000 a year or more. Christie used his line item power to veto that provision on June 30. Though the Governor claimed that the issues were caused by lower-than-expected tax revenue in 2014, critics claim that he was overly optimistic to begin with.

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