New Jersey Democratic legislators on Monday failed to gather enough votes to extend a tax on millionaires that would have been used to provide property tax relief for senior citizens and the disabled.
Democrats wanted to override Republican Governor Chris Christie's veto of the plan but were unable to get any Republicans to join them to muster the two-thirds majority needed in the state Assembly.
The Democrats had wanted to reimpose a one-year, 10.75 percent tax on income above $1 million that would have hit 16,000 people, some of them likely to work as financial professionals just across the Hudson River in New York.
The clash in the state legislature is part of a wider battle over how to erase a $10.7 billion budget deficit and is emblematic of the decisions facing states across America whose budget deficits have soared during the recession.
Both houses of the legislature, which are controlled by Democrats, previously approved the tax in May but it was vetoed by Christie, who has pledged not to raise taxes.
Representative Paul Moriarty, a Democrat who sponsored the override bill, rejected claims that the initiative was just a political stunt to force Republicans to vote against senior citizens ahead of November elections.
This isn't theater to seniors who call my office worried about how they will keep their homes and pay their taxes, Moriarty told the Assembly.
Republican minority leader Representative Alex DeCroce attacked the override plan. This is typical of the majority party -- spending money they really don't have, DeCroce said.
The millionaires' tax would have raised $637 million for rebate checks of up to $1,295 for some 600,000 senior citizens who would otherwise face steep increases in their property taxes during fiscal 2011.
Governor Christie's heartless vetoes denied property tax relief to senior citizens struggling to make ends meet, Assembly Majority Leader Joseph Cryan said in a statement.
The governor vetoed the tax because taxing millionaires, many who own small businesses, would crimp their likely hiring in a tough economy, Christie spokesman Michael Drewniak said.
Two months after taking office in January, Christie announced cuts to hundreds of state programs and spending reductions in every department, calling New Jersey's budget hole a Grand Canyon.
In his May 20 veto of the tax, Christie said the bill would have represented the 116th increase in taxes in eight years.
As part of his effort to overhaul New Jersey's finances, Christie has proposed a constitutional amendment placing a 2.5 percent cap on annual increases in residential property taxes.
Christie's plan was backed on Monday by Cory Booker, mayor of Newark, New Jersey's largest city. The plan has been endorsed by more than 200 other mayors, according to the governor's office.
New Jersey's fiscal shortfall, at 37.4 percent of the current year's budget, is the second-highest among U.S. states, second only to Nevada, according to the Center on Budget and Policy Priorities.
(Reporting by Jon Hurdle; Editing by Mark Egan and Bill Trott)