It includes a modest increase in state aid to schools and the largest ever payment into the public workers’ pension system, but it’s two tax-related proposals that are garnering the most attention and Democrats are bashing both of them.

The $32.1 billion spending plan is more than $2 billion above the current budget. It provides $213 million more for schools over last year. The Christie Administration is projecting revenue growth of 7.3% in the coming year. It is with that revenue that the Administration hopes to fund the first phase of the 10% state income tax cut which is expected to cost $183.3 million in the first year. The legislature would need to approve the tax cut.

“The people have spoken, and they want lower taxes,” says Christie. “So in this budget, I have included the proposal I outlined for you a few weeks ago in the State of the State address. I propose to reduce personal income tax rates, across-the-board, for every New Jerseyan, by 10%, and I propose to begin the three-year phase-in of the cut with this budget. A 10% tax cut for every working New Jerseyan will help families to keep more of what they earn. It will make us more competitive with other states and attract more new jobs to New Jersey. Every New Jerseyan deserves a tax cut. Lower tax rates will relieve over- burdened middle class families. They will keep job creators here.

The Governor also proposes increasing the earned Income Tax Credit from 20% to 25% to provide help for New Jersey’s working poor. Christie explains, “Some hard working, low-income New Jerseyans pay no income tax at all. In this budget I am proposing relief for them, too. In 2010, our disastrous budget situation forced us to trim the Earned Income Tax Credit. With this budget, I propose to increase it, from 20% to 25% over the next two years. With my proposed increase, New Jersey will have one of the most generous state tax programs for the working poor in the nation – with an average annual benefit of 550 dollars.”

Christie’s tax cut and tax credit plans drew huge applause from those in attendance yesterday, but if he was planning a victory lap, he probably doesn’t need to go all the way around the track. The tax reduction proposal requires legislative approval, but Democrats who control both houses are essentially saying it is dead on arrival. They also say Christie is taking credit restoring the Earned Income Tax Credit after he was the one who slashed it in the first place.

Video by Dino Flammia

The Democratic Reaction

• More reaction to the NJ Budget Address

Asked his thought son the income tax cut plan, State Senate President Steve Sweeney said, “He’s wrong and we’re not going to stand back and support an income tax cut that’s only going to benefit the wealthy and give crumbs to the middle class.”

Assembly Speaker Sheila Oliver says “No matter how the Governor dresses it up, a 10 percent across-the-board income tax cut is still a disproportionately generous gift for the wealthiest among us, one that will have little-to-no impact on the lives of working class New Jerseyans. Even more puzzling is the lack of details on how the Governor intends to pay for his millionaires’ gift. The most glaring omission in his speech, however, was the complete and utter absence of a plan to address property taxes.”

“The governor’s budget plan is just more of the same – tax cuts for the rich at the expense of the middle-class,” says Assembly Democratic Leader Lou Greenwald. “Governor Christie just doesn’t get it. His zeal for tax breaks for the rich while middle-class families struggle with the highest property taxes in the nation is wrong.”

Democrats agree with Christie that the people of New Jersey want lower taxes. They just think he picked the wrong tax to cut. They feel the focus should be squarely on property taxes. They say the average Jersey resident would be lucky to see $100 in savings from the income tax cut plan while millionaire’s would receive over $7,000.

As expected, Christie’s fellow Republicans are very supportive of his spending plan. Senate GOP Leader Tom Kean says, “Reducing the income tax is an investment in our state just like education, state colleges and universities, property tax relief, and support for the disadvantaged. It is a needed investment in job creation for the still far too many workers seeking employment. The Governor’s budget presents us with a choice: continuing to do what has been working for New Jersey’s economy and job market, or return to the days when unchecked taxes, spending, and borrowing turned our state into an economic disaster.”

Assembly Republican Leader Jon Bramnick says, “Governor Christie outlined a fiscally responsible budget that will advance the New Jersey recovery for taxpayers and businesses. The Governor’s budget increases state educational aid to its highest level in history, makes the required pension payment of $1.1 billion, and cuts income taxes by 10 percent. As a result of Governor Christie’s leadership, we have a budget that funds core priorities and provides tax relief for every New Jerseyan.”

Municipal aid is down slightly, but the Governor proposes increasing property tax relief aid by nearly $50 million. He plans to reduce transitional aid to the state’s distressed cities by over $56 million. There will be no changes to homestead rebate programs or eligibility for the Senior Freeze program.

Funding for higher education will increase $107 million over the current year. Funding for the state’s hospitals will remain flat at $986 million.

The budget plan includes a payment into the public employees’ pension system of $1.1 billion, the largest single payment in New Jersey history. In the current fiscal year the payment was $484 million.

The spending plan calls for $1 million to recruit and select two State Police training classes. There’s $89 million to support Christie’s $1.6 billion Transportation Capital Plan. $2.5 million would be allocated to establish a mandatory drug court for non-violent offenders all 21 counties. Almost $35 million would be set aside for new community placement for New Jerseyans with disabilities. The State Rental Assistance Program would get $21 million in funding.

The spending plan also includes the continuation of business tax cuts and job growth incentives.

The budget proposal anticipates a $300 million surplus, but State Treasurer Andrew Eristoff says Christie expects to be able to add to the surplus as the year goes on.

Andy Kropa, Getty Images

Hall of Fame linebacker Harry Carson has nixed a bid to run for Congress as a Democrat in New Jersey.

The 58-year-old retired New York Giant and Football Hall of Famer told The Associated Press in January he had been considering a run against five-term Republican Rep. Scott Garrett in a northern New Jersey district.

Carson reportedly told Bergen County Democratic officials late Tuesday that he has decided not to run.

Carson spent his entire professional career, from 1976 to 1988, playing for the Giants.

Since retiring, he worked in sports broadcasting and started his own sports consulting and promotions company.

Although he has never held public office, he was being recruited by officials with the Democratic Congressional Campaign Committee.

(Copyright 2012 by The Associated Press. All Rights Reserved.)

Stacy Proebstle, Townsquare Media

Christie’s proposal includes $212 million more for education. Most school districts would see modest increases in state aid. He will also increase financing for preschool by $14.6 million and school choice aid by $14.2 million.

• SPECIAL SECTION: Christie’s NJ Budget Address
• REACTION: Politicians react to Christie’s NJ Budget

The school funds would not fully restore the reductions that Christie implemented when he first assumed office, according to the state School Boards Association.

“We’re making progress towards that…but for the non-abbott school districts, which is approximately 550 school districts in the state…the funding does not bring them back to that level.”

NJEA spokesman Steve Wolmer said while he was relieved to hear about the increase in education funds, the amount isn’t enough.

“It’s a really miniscule amount…let’s be honest…in terms of the total amount of the budget…but it is an increase and that’s important.”

Wolmer said its important to note that Christie cut education funding for the past two years.

“In the past he has cut $1.4 billion to education…so this only restores about one-seventh of that.”

Department of Education officials said individual districts today are expected to receive state aid figures.

The budget also calls for a 6 percent, $107 million across the board increase in funds for higher education, which includes direct aid and tuition aid grants. It comes on the heels of two years of flat or decreased funding.

Municipal aid would remain flat under Christie’s proposal and transitional aid would be cut 56% for financially strapped towns.

“The governor has maintained the same funding levels as last year…and that’s good news…we have to look at the transitional aid figures and what that all means…but the formula aid that provides a dollar for dollar offset in property taxes has remained constant and that is good news” said Bill Dressel, executive director of the New Jersey League of Municipalities.

Dressel said the 2-percent property tax cap and other tool kit reform measures like the pension and health benefits bills have helped towns hold the line on spending, but more needs to be done.

“There are a lot more tool kit reforms that need to take place.”

Mayors, who were hoping for the best, but preparing for the worst, will be pleased that there won’t be any cuts, said Dressel. “We are optimistic there won’t be any cuts when this is all said and done but that will all depend on the state budget committees and what they decide to do now that they have this blueprint proposal from the governor.”

Dressel said today begins several months of budget negotiations.

“It’s the start of the budget race and it ends the beginning of July…so we’re off and running.”

The Legislature must adopt a balanced budget by July 1, the start of the new fiscal year.

Mario Tama, Getty Images

Supporters say the legislation is absolutely necessary, and it would pump more money into the local economy, but critics insist just the opposite would happen.

Stefanie Riehl, Assistant Vice President for the New Jersey Business and Industry Association, says “historically the business community has had concerns about raising the minimum wage – especially in difficult economies like the one that we are in right now…the bill to be considered tomorrow would boost wages by 17 percent, and that would make New Jersey’s minimum wage the 3rd highest in the nation, behind only Washington and Oregon- and it would put our businesses at a competitive disadvantage.”

She says “our recent business outlook survey revealed that for the 3rd consecutive year in a row, more companies are reporting a decline in their actual sales – their profits – than reported an increase…sales are not rising fast enough to accommodate forced wage hikes like the one that’s being proposed.”

Riehl also points out if the measure is passed “that could be a problem when businesses are deciding where to locate, or where to stay or what jobs that they can sustain going forward…when there is a minimum wage increase, that there is sometimes a reduction in the hours (of full-time employees) because again, there is a set amount of money set aside for payroll…I would argue that we’re seeing an unprecedented economic time – so I don’t know that anyone truly understands where that tipping point lies.”

She also says the NJBIA emphasizes increasing wages as a result of people gaining in their skill sets – “so for instance there are state programs that are available that provide workers with basic skills that they need and those skills translate throughout their careers…and that’s what makes them more marketable and that’s what causes an increase in wages that’s not artificial and really will help the person in the end get a better quality of life.”

Governor Christie has indicated he has serious reservations about the legislation.

Blimp U.S. Navy in Lakehurst NJ, by Ilya Hemlin Townsquare Media

The Navy explains its reasoning behind temporarily deflating the helium-filled test MZ-3A Airship housed at the Mega Base in Lakehurst.

Naval Air Systems Command Center Spokesman Doug Abbotts says the craft recently returned from a mission for the U-S Army conducting 120 hours of testing during the Fall and early Winter months and has no customers presently lined up. He says “what we’re going to do, if we can’t find a customer by the 9th of March, is to just deflate it, take the helium out of it and put it in a crate until we find our next mission.”

Abbotts says it’s simply too expensive to keep the inflated airship docked at the base without going on any missions because they have to keep a crew on hand to monitor and maintain helium levels.

However, he says the airship is getting positive feedback from customers so far. He says it’s gotten a 99 percent effectiveness rate for its ability to test intelligence surveillance sensors and cameras.

Abbotts says when needed, it takes just three days to inflate and staff the Blimp with contractors for a new mission. When asked about the future of the vessel, he says “We hope to have a customer for it soon.  Hope to put it back up in the air and be testing sensors and cameras.”

The test air ship is owned by the U-S Navy but operated by contractors.

Spencer Platt, Getty Images

Assemblyman Al Coutinho says the measure would allow e-businesses that build distribution warehouses in Jersey to receive a sales tax holiday until the beginning of September, 2013 – “The ones that would come in and make a capital investment -with a minimum of 65 million dollars – and create a minimum of 15 hundred jobs.”

He says, “We’re fighting to get New Jerseyans back to work, and we’re really optimistic this can kill a few birds with one stone…New Jersey’s not quite back – we’ve made some progress…but we’re not happy with the economy – New Jersey’s unemployment is still higher than the other areas.”

The measure includes a transportation accessibility requirement. If the online retailer locates within a quarter-mile radius of a public transportation facility, the bill would require them to establish a plan to encourage employees to use public transportation.

If it locates farther from a public transportation facility, the bill would require it to work with NJ Transit and others to establish an alternative plan that would provide viable commuting options to employees who rely on public transportation.

Coutinho points out the legislation would help to level the playing field when it comes to online versus brick- and-mortar retailers, because the way things stand right now, people are buying things from Amazon-dot-com, but “New Jersey’s not collecting any sales tax, and New Jersey’s not getting any job creation out of it because they are basically shipping it from some location out of state. By attracting them to have their fulfillment centers in the state of New Jersey, you are now creating jobs at these huge warehouses which – which would have upwards of 750 people in each. The economy continues to improve, but we’re not out of the woods yet- while the unemployment numbers may be a little bit better, they’re nowhere where they need to be.”

“Assembly Democrats are committed to job creation, and we’re optimistic about this legislation that will welcome online retailers to New Jersey and provide reliable jobs while leveling the playing field with existing retailers,” said Prieto (D-Bergen/Hudson), the Assembly Budget chairman. “We look forward to a positive conclusion that leads to fair competition, job creation and economic development. This is a significant agreement that benefits our state.”

He says “This is about creating jobs for New Jerseyans and protecting New Jersey retailers both large and small by creating an equal footing with regards to sales tax collection…we’re talking here about full-time jobs with benefits and a major construction project in which workers will earn livable wages. When all is said and done, we will have new jobs and online retailers will play by the same rules as everyone else. These are all positive developments.”

The Jersey Chapter of The Alliance for Main Street Fairness is criticizing the legislation, saying Garden state-based businesses have been operating at a competitive price disadvantage for years, and Internet retailers like Amazon have exploited a loophole and failed to collect the sales tax – so they should not get any tax breaks.

Rick Santorum campaigning in Ohio. (Jay LaPrete/Getty Images)

A new survey shows that a surging Rick Santorum is running even with Mitt Romney atop the Republican presidential field, but neither candidate is faring well against President Barack Obama.

The Associated Press-GfK poll shows Obama topping 50 percent support when matched against each of the four GOP candidates and holding a significant lead over each of them eight months before the election.

• NJ Decides: Presidential Election 2012
• INTERACTIVE: GOP Campaign
• INTERACTIVE: AP-gfk Poll

Republicans are divided on whether they’d rather see Romney or Santorum capture the nomination, with Newt Gingrich and Ron Paul lagging behind. It’s a troubling sign for the better-funded Romney as the GOP race heads toward crucial votes in his home state of Michigan, in Arizona and in an array of states on Super Tuesday, March 6.

Arizona finally gets GOP candidates’ attention

A Mitt Romney supporter holds up a sign. (Eric Thayer/Getty Images)

Rick Santorum is looking for another upset while Mitt Romney is hoping to keep his leading rival at bay as they prepare for the 20th debate of the race for the Republican presidential nomination.

Santorum arrived ahead of any of his rivals for pre-debate campaigning in Arizona, a state that has long been assumed safe for Romney.

Polls have long shown Romney with a solid lead in Arizona, where all 29 delegates at stake are reserved for the top vote-getter in the primary. None of the candidates has devoted much time to the state, and television ads have been scarce.

In Michigan, on the other hand, Romney, Santorum and their allies have poured money into television ads.

Both Arizona and Michigan hold primaries on Feb. 28.

Unions gearing up to spend big in 2012 election

President Back Obama with AFL-CIO President Richard Trumka. (Chip Somodevilla/Getty Images)

Labor unions are gearing up to spend more than $400 million to help re-elect President Barack Obama and back other Democrats at the federal and state level in a fight for labor’s survival.

Union leaders say they have little choice as they try to beat back GOP efforts to curb collective bargaining rights or limit their ability to collect dues.

The nation’s largest public employee union has already spent $1 million on television ads aimed at weakening GOP presidential hopeful Mitt Romney, the candidate they expect to win the nomination.

But union resources are being spread thin after they spent millions last year to fight anti-union measures in Ohio, Wisconsin and other states. They are also spearheading a recall of Republican Wisconsin Gov. Scott Walker.

(Copyright 2012 by The Associated Press. All Rights Reserved.)

U.S. Treasury Secretary Timothy Geithner (Alex Wong, Getty Images)

A senior administration official says that the Treasury Department plans to release information about its forthcoming plan to overhaul the corporate tax system on Wednesday.

Administration officials including Treasury Secretary Timothy Geithner have been saying for some time that they would soon release broad principles about its plan.

The top corporate tax rate is 35 percent, second highest in the world behind only Japan. Few companies pay that rate because they take advantage of tax breaks.

Geithner told Congress last week that the administration would propose eliminating some tax breaks.

Obama has said he would lower the tax rate but used no figures. He has said he would eliminate deductions for U.S. companies that move jobs or profits overseas.

The official spoke on condition of anonymity to describe administration plans.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)

Flickr user Holly Ford Brown

Atlantic City’s Steel Pier has received final approval for a $6.1 million loan from the state agency tasked with turning around the seaside resort.

The pier’s owners will use the money from the Casino Reinvestment Development Authority to renovate and expand the historic site. The three-year project — expected to cost about $102 million — calls for new rides, a midway and a food court.

The owners also plan to add a restaurant/nightclub and turn it into a non-casino attraction that will be open nearly year-round.

The loan approval was one of several acts the CRDA took Tuesday.

It also approved $1.2 million to buy 990 trash and recycling bins for the Boardwalk and other Tourism District areas. Another $1.7 million will go toward the ongoing demolition of dilapidated properties.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)

President Barack Obama (R) is joined by Health and Human Services Secretary Kathleen Sebelius (Mark Wilson/Getty Images)

The Obama administration is awarding loans totaling more than $638 million to start up new health care cooperatives serving eight states.

The government says the new nonprofit health insurers will be run by their customers and will be designed to offer coverage to individuals and small businesses.

Awards were announced Tuesday for co-ops serving Montana, Iowa, Nebraska, New Jersey, New Mexico, New York, Oregon and Wisconsin.

They are envisioned as a way to offer affordable coverage when President Barack Obama’s health care reform law requires everyone to carry insurance.

Starting in 2014, millions of people now uninsured will buy private coverage in new state markets. The co-ops will compete in these state-run insurance exchanges.

Tax-credit subsidies will help customers with the cost of the insurance.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)