New Jersey Senate Democrats proposed a rival budget plan to Gov. Chris Christie's that would make a full pension payment while raising taxes on corporations and the wealthy.
The proposal sets up a showdown with Mr. Christie, a second-term Republican who has proposed cutting $2.5 billion of pension contributions this year and next to make up for a revenue shortfall. Mr. Christie also has rejected Democratic lawmakers' past efforts to increase taxes.
“This is a reasonable way to move forward and present a budget that meets all of our obligations,” Senate President Stephen Sweeney, a Democrat, told reporters Wednesday.
Mr. Sweeney said the higher taxes would raise $1.57 billion. He said his proposal comes from just the Senate, not the Assembly, and that he hasn't submitted it yet to the governor's office.
More than a dozen unions have filed lawsuits against the state and Mr. Christie since the governor announced May 20 to withhold a majority of pension payments for the current fiscal year and next fiscal year.
Mr. Christie said he would cut the payment for the fiscal year ending June 30, 2014, to $696 million from the promised $1.58 billion. He also proposed cutting the state contribution for the fiscal year ending June 30, 2015, to $681 million from the promised $2.25 billion.
Lawmakers and Mr. Christie must pass a budget by July 1, the start of the fiscal year. Democrats control both houses of the Legislature. Without a spending plan in place, state government might face a shutdown.
Kevin Roberts, a spokesman for Mr. Christie, said he hasn't seen Mr. Sweeney's budget proposal and referred to comments the governor made about the budget earlier this week.
“I am not going to raise taxes on the people of New Jersey to pay for a broken, bloated pension system and a Cadillac health-care system,” Mr. Christie said in a radio interview.