If Chris Christie is sure about one thing, it’s the lack of any tax increase in New Jersey since he’s been governor.
So confident is the governor that he pointed out his achievement during Wednesday’s monthly "Ask The Governor" radio call-in program on New Jersey 101.5 FM. It’s a claim he’s made before.
"Not one tax has been raised since I've been governor," Christie said during a brief portion of the show where he compared his fiscal actions as governor with those of state Sen. Barbara Buono (D-Middlesex), who is challenging him in the Nov. 5 gubernatorial contest.
Previous Truth-O-Meter rulings have determined this claim isn’t entirely accurate. And PolitiFact New Jersey remains as confident as the governor in that fact.
Let’s begin by reviewing the major taxes in New Jersey.
It’s true that rates for income, sales and corporation business taxes -- the state’s three biggest revenue generators -- have not gone up under Christie.
But tax increases have resulted when Christie cut funding for tax-credit programs, according to several experts who have told us that those reductions are essentially tax increases.
"For practical purposes, decreasing tax credits is the same as a tax increase. The person's effective tax rate goes up," David Brunori, a research professor of public policy at The George Washington University, explained in an e-mail. "Still, most people think of tax increases as rate hikes."
Rates haven’t increased, but the reduced tax credits mean some homeowners and certain low-income individuals are receiving less money to offset their tax bills.
The Earned Income Tax Credit is one example.
New Jersey scaled back the EITC during Christie’s first year in office. The state Treasury Department website has explained that the EITC "reduces the amount of New Jersey tax you owe and may also give you a refund, even if you have no tax liability to New Jersey."
In addition to that reduction, Christie cut spending for two property tax relief programs.
Budget analyses from the state’s nonpartisan Office of Legislative Services showed that homeowners who qualified for one of those programs, now called the Homestead Benefit program, received an average rebate of more than $1,000 in fiscal year 2010. Now, the average credit is less than half that amount.
State Treasury Department officials have argued that the tax credit programs are payments from the state, and reductions in credits do not represent tax increases.
Bill Quinn, a Treasury Department spokesman, has said that the EITC in most cases actually represented a subsidy to low-income people and noted that more than 75 percent of people getting the credit in 2010 owed no New Jersey tax.
Still, Dennis J. Ventry, Jr., a professor at University of California Davis School of Law, said that a reduction in a tax credit is "absolutely a tax increase."
"Tax credits reduce tax liability for eligible claimants. Thus, cutting, restricting, or repealing a tax credit for an otherwise eligible individual or business would -- absent other changes to the tax system such as a reduction in rates -- result in higher taxes owed," Ventry said.
Richard Pomp, a law professor at the University of Connecticut and state taxation expert said debate about the issue is semantics. "To someone who has had a benefit cut that is less money they have to spend," whether you call it a tax increase or a spending cut.
However, Joseph Henchman, vice president of legal and state projects at the Tax Foundation, a business-backed group, said it’d be wrong to equate reductions in tax credits as tax increases or spending cuts. "They have elements of both and are strictly neither," he said.
Christie said on a radio program, "Not one tax has been raised since I've been governor."
The governor is correct that the major taxes in New Jersey that generate revenue have not increased. But he doesn’t acknowledge that cuts he’s made to tax-relief programs have resulted in tax increases for certain segments of the population.
Several experts we talked to agreed that reductions in tax-relief programs can result in higher taxes owed for some people. That amounts to an increase, and that’s why this claim is rated Half True.
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