The vote in both the Senate and Assembly budget panels was partisan with all members of the Democratic majority voting for the tax and all Republicans voting no during a late-night session Tuesday. Republican Sen. Jennifer Beck said her colleagues were being unrealistic, since their budget is based "on revenues that aren't going to be there" given the governor's attitude.
By law, New Jersey must have a budget approved by the legislature and signed by the governor when the fiscal year ends Monday. Christie reduced his original proposal by almost $2 billion because of lower-than-expected tax revenues to $32.7 billion.
The most contentious issue is the size of the state payment to pension funds for public employees. The Democrats have allocated $2.25 billion and the governor's proposal only $681 million.
In the past 20 years, governors of both parties have failed to fund the pension system fully.
"This is a document that meets our obligations -- our debt obligations, our pension obligations," said Sen. Paul Sarlo, the Democratic chairman of the Senate Budget and Appropriations Committee.
Both committees approved the tax hike, while the Assembly Budget Committee also passed a $34.1 billion spending plan.
The Democrats also approved a one-year increase in the corporate tax rate from 9 percent to 10.35 percent. They estimate that would add $398 million in revenues.
The increase in the personal income tax would set a top rate of 10.75 percent for income beyond $1 million. Millionaires, an estimated 16,000 in the state, would continue to pay the same rates as everyone else on the rest of their income.
The revenue is estimated at $723 million. The increase would end after three years.