TRENTON - New Jersey Senate Democrats on Wednesday rebuffed Gov. Christie's plan to balance the budget by cutting pension-fund payments, proposing instead to raise taxes on the state's highest earners.

The $34.4 billion plan for the fiscal year beginning July 1, presented by Senate President Stephen Sweeney (D., Gloucester) and Majority Leader Loretta Weinberg (D., Bergen), would create a 10.75 percent tax bracket for those with incomes of more than $1 million.

That rate was last in effect in 2009 under Democratic Gov. Jon S. Corzine. Christie vetoed an extension of it when he took office in 2010.

Those who make between $500,000 and $1 million, currently taxed at a rate of 8.97 percent, would pay 10.25 percent.

These two measures, part of a package of revenue proposals, alone would raise about $700 million, according to Sweeney's plan.

Of the 2.7 million tax returns submitted to the state in 2011 - the year for which the most recent Treasury Department data are available - about 44,000 were filed by those with incomes of $500,000 or more. Of those, about 15,000 were filed by those who made $1 million or more.

"This is a product that balances the budget, meets our obligations, and supports the men and women that work hard in this state," Sweeney said at a Statehouse news conference.

Facing a projected $1.7 billion revenue shortfall, Christie last month slashed his budgeted pension payment from $2.25 billion to $681 million.

Christie, a Republican considering a bid for the presidency in 2016, has repeatedly vowed not to raise taxes and is almost certain to veto any income tax hikes.

Lawmakers are required by the state constitution to pass a balanced budget by June 30.

Sweeney accused Christie of reneging on landmark legislation signed into law in 2010 and 2011 that required public employees to contribute more toward their pensions and health benefits. The state agreed to phase in bigger payments over seven years.

"I knew what I signed. I've got the scars to show it, right or wrong," said Sweeney, an ironworker who was criticized by public-sector unions for backing those changes.

"Right when we were doing reform, I knew the ramifications of doing that. He knew it, too. He was known nationally because of benefit reform," Sweeney said of Christie.

Sweeney said the income tax hikes - which he referred to as a "millionaire's tax" - could end or be phased out as the economy grows.

His plan would also add a 15 percent surcharge on the corporate business tax to raise $375 million in revenue, suspend certain grant payments for $175 million, assume lapses, and use a one-time adjustment in the tax rate.

None of the measures would be permanent, Sweeney said. Overall, the plan would raise about $1.6 billion.

New Jersey Working Families, a coalition of labor and community organizations, praised the Democrats' budget proposal as a "bold plan that sets New Jersey on the path towards resolving our fiscal crisis while protecting the middle class."

Christie has vetoed tax hikes on the wealthy before, arguing that those earners would leave the state, reducing revenue.

"I am not going to raise taxes on the people of New Jersey to pay for a bloated, broken pension system and a Cadillac health-plan system," Christie said Monday on his monthly radio program.

On Wednesday, the governor's spokesman, Kevin Roberts, added: "The governor has been emphatic that he will not raise taxes on already overburdened New Jersey taxpayers suffering from one of the harshest tax structures of any state in the country."

Assembly Republican Budget Officer Declan O'Scanlon of Monmouth County said the plan "goes right to the throats of the employers in New Jersey. This approach will chase private-sector jobs out of the state."

Assembly Speaker Vincent Prieto (D., Hudson) said in a statement that he would review the Senate plan. Both houses are controlled by Democrats.

Last month, after the Treasury Department's revenue projections proved too optimistic, Christie announced he would cut the pension payment for the fiscal year that ends June 30 and next fiscal year. His revised budget is $32.7 billion.

Unions have filed lawsuits challenging the pension cuts for the current fiscal year.

Sweeney said "there's a lot of things we can do" if Christie were to veto the Legislature's budget.

Adding a wrinkle to budget negotiations, Senate Republicans said they opposed $137 million in tax and fee hikes Christie proposed. To make up for the lost revenue, they identified cuts in spending at the Department of Human Services, Department of Education, a hospital, and other areas.

They also oppose the Democrats' plan.

"We think there's a better alternative than increasing fees," Minority Leader Thomas H. Kean Jr. (R., Union) said Monday.