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Gov. Chris Christie said he vowed to the people of New Jersey that he would not raise their taxes and that’s the only oath that matters.
But his allegiance to that pledge falls into murky territory.
"I haven't raised taxes in the time I've been the governor of New Jersey and I didn't need to sign a pledge not to," Christie said at an Aug. 20 news conference in Asbury Park when asked about an anti-tax oath signed by many Republicans. "I made a pledge to the people of the state not to. I don't need to make a pledge to anybody else."
With Christie expected to flaunt his New Jersey credentials in the keynote address at the Republican National Convention next week, PolitiFact New Jersey wondered whether his tax claim is accurate.
Rates for the state’s three biggest revenue generators -- income, sales and corporation business taxes -- have not gone up under Christie.
But the governor has cut funding for tax credit programs and several experts said those reductions are, in effect, 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, said in an e-mail. "Still, most people think of tax increases as rate hikes."
So rates haven’t increased, but some homeowners and certain low-income individuals are receiving less money to offset their tax bills.
New Jersey scaled back the state’s earned income tax credit -- which the state Treasury Department website says "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 Christie’s first year in office.
Also, Christie cut spending for two property tax relief programs.
Budget analyses from the state’s nonpartisan Office of Legislative Services shows homeowners who qualify for one of those programs, what is 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 argued that these tax credit programs are payments from the state and so reductions in credits do not represent tax increases.
Bill Quinn, a Treasury Department spokesman, said "the Earned Income Tax Credit in most cases really represents a subsidy payment to low income citizens," pointing out that more than 76 percent of earned income tax credit recipients in 2010 owed no New Jersey tax.
But 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 professor of law at the University of Connecticut and state taxation expert said, "why are we fighting the semantic issues? 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 a mistake 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, "I haven't raised taxes in the time I've been the governor of New Jersey."
The rates for the state’s three major taxes have not increased during the governor’s tenure.
But Christie reduced funding for several tax credit programs. The governor’s administration argues those tax credits are spending programs, but several experts said reductions in tax credits amount to tax increases.
We rate this claim Half True.
To comment on this ruling, go to NJ.com.
Audio of Gov. Chris Christie news conference in Asbury Park from Star-Ledger reporter, Aug. 20, 2012
E-mail interview with Dennis Ventry, professor of law at University of California Davis School of Law, Aug. 21, 2012
E-mail interview with Joseph Henchman, vice president of legal and state projects at the Tax Foundation, Aug. 21 & 22, 2012
Interview with Richard Pomp, professor of law at the University of Connecticut School of Law, Aug. 21, 2012
E-mail interview with David Brunori, research professor of public policy at the Trachtenberg School of Public Policy and Public Administration at The George Washington University, Aug. 21, 2012
PolitiFact New Jersey, Gov. Chris Christie says the New Jersey budget doubled property tax credits and had no new tax increases for the second consecutive year, July 24, 2011
E-mail interview with Bill Quinn, spokesman for New Jersey Treasury Department, Aug. 22, 2012
New Jersey Department of Treasury, Homestead Benefit Program, accessed Aug. 21, 2012
PolitiFact Wisconsin, Gov. Scott Walker says he eliminated Wisconsin’s $3.6 billion deficit without raising taxes, Jan. 29, 2012
PolitiFact, Mitt Romney says Barack Obama has raised taxes 19 times, Jan. 11, 2012
New Jersey Office of Management and Budget, The Governor’s FY2012 Budget Summary, Feb. 22, 2011
FactCheck.org, Christie’s Tax Tale, Sept. 28, 2011
New Jersey Office of Legislative Services, Analysis of the FY 2013 Budget: Department of Treasury, April 2012
New Jersey Office of Legislative Services, Analysis of the FY 2012 Budget: Department of Treasury, May 2011
New Jersey Office of Legislative Services, Analysis of the FY 2011 Budget: Department of Treasury, May 2010
New Jersey Division of Taxation, Corporation Business Tax Overview, accessed Aug. 22, 2012
New Jersey Division of Taxation, Gross Income Tax Overview, accessed Aug. 22, 2012
New Jersey Division of Taxation, Sales Tax Overview, accessed Aug. 22, 2012
New Jersey Division of Taxation, Summary of 2010 Tax Legislation, accessed Aug. 22, 2012
New Jersey Division of Taxation, Summary of 2011 Tax Legislation, accessed Aug. 22, 2012
New Jersey Division of Taxation, 2011 NJ Earned Income Tax Credit, Aug. 22, 2012
The Associated Press, Fact-checking Gov. Christie's favorite budget boasts, March 5, 2011
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