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Voter revolt possibility keeps tax reform alive

Lawmakers under gun to follow through on plans

BY KRISTINA FIORE
DAILY RECORD
Tuesday, January 2, 2007

Property tax reform activists hope the fear of being voted out of office in November will compel the state Legislature to make substantive changes in a system that now ranks New Jersey tops in the nation in per capita property tax burden.

The terms of all state senators and Assembly members expire at the end of 2007. Some think tax reform could affect their chances of reelection.

Many lawmakers don't see much of a threat as long as they continue to grapple with recommendations for reform generated by four panels in the fall.

With property tax bills averaging $6,000 per household in New Jersey -- typically higher in Morris County -- some voters said they might think twice about voting for incumbents if no significant reforms are adopted.

"If they don't come through (on property tax reform), as far as I'm concerned, it's sayonara," said Denville resident William Greenberg Jr.

Greenberg said that even though politicians have stumbled over property tax reform efforts for the last hundred years, that's no reason to believe a new batch of legislators can't accomplish it.

"The message would be sent (to legislators) that you're there to do something, and if you don't, then you're out," said Greenberg, whose property taxes are above the state median.

"The only way to get the message to the politicians is to do something drastic, and (replacing incumbents) would be drastic."

Jay Healy, who has lived in Madison for 30 years, said the Legislature has been "a lot of talk and not enough action" for a state whose property taxes are the highest per capita in the nation.

"If they're not going to lay the foundation to get (property tax reform) done for us," he asked, "why should we re-elect them?"

Jerry Cantrell, president of The Silver Brigade, a Morris County-based tax reform group that released a 10-point proposal in November 2004 to accomplish that goal, said there's a "general unrest" among residents when it comes to stalling -- and local legislators should expect to see some backlash.

"I think anyone down (in Trenton) should be concerned, whichever side of the aisle they're on," Cantrell said.

Cantrell observed that Republican leaders who blame the Democratic majority for being incapable of effecting reforms in Trenton. "It doesn't matter if you like the Mets or the Yankees. If they're both losing, they're both losing ...You've got to change the players."

Not so fast ...

Others say they'll weigh their options closer to election time.

Mark Salisbury of Bernardsville said part of the reason he recently sold his house is his five-digit property tax bill. He said he wants to see what steps individual legislators take toward property tax reform before wiping the entire legislative slate clean. He believes accomplishing reform is especially "frustrating"when Republican leadership is in the minority.

Legislators serving the Morris County districts -- all of whom are Republicans -- finger the Democratic majority as being incapable of coming up with a solution -- even though four nonpartisan committees were responsible for proposing reforms last month.

Assemblyman Michael Patrick Carroll, R-Morris Township, said property tax reform is a small concern for his reelection campaign and those of his Republican colleagues.

"It's always a concern we'll get blamed for the other party's misdeeds and failings," Carroll said. However, he believes that reforms such as doing away with Abbott school district funding and bringing public employee benefits in sync with those of the private sector appeal to Morris residents.

"I have great faith in the intelligence of the people of Morris County," Carroll said. "Most people in Morris County make decisions for themselves."

Indirect approaches

Other legislators said alternate reform plans such as cutting state spending or increasing sales tax would be a better -- though indirect -- approach toward property tax reform.

"This administration doesn't want to cut anything," said Assemblyman Alex DeCroce, R-Parsippany. "They like to spend, but they don't want to cut."

Cantrell, however, said he'd prefer to see property tax reforms from within. "We have to say no to shifting the burden to other areas," he said.

The Silver Brigade's 10-point reform plan includes keeping educators' salary increases in line with the cost of living and amending the New Jersey Constitution to mandate that any proposed state budget increase that exceeds the cost of living become a ballot question.

Assemblyman Joseph Pennacchio, R-Montville, said he and state Sen. Richard Merkt, R-Mendham Township, have proposed legislation to bring any issue that deals with state borrowing to ballot.

Democratic viewpoint

Morris County Democratic Chairman Lew Candura, however, said even though his party does not have any candidates yet for the legislative election, the property tax reform platform is a possible opportunity for his party.

"The Republicans always seem to blame the Democrats to give themselves a place to hang their hats, but truth be told, a lot of problems we have today stem from Republican control,"he said, referring to overspending by former Gov. Christie Whitman's administration. "At least the Democrats are trying to fix the problem."

Meanwhile, 75 percent of voters in a poll on the Daily Record's Web site said they would not vote for incumbents if property tax reforms are not achieved. However, some remained doubtful that even new legislators could accomplish reform.

Virginia Arnold of Florham Park said she doesn't believe that any legislator -- new or old -- can deal with the property tax problem.

"This is New Jersey," she said. "I've come to expect it."

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Learning to pass the bucks
Sunday, January 14, 2007

I have always regarded the public education system of this state as a clever conspiracy against the taxpayers.

Nothing indicates that more than the state's long-term plan to build a new high school in Hobo ken even though the current high school is relatively new and has such luxuries as an indoor swimming pool and a huge auditorium and gym.

Though Hoboken has become in recent years an affluent bedroom community for Wall Street workers, it is a so-called "Abbott" school district, i.e., one that theoretically lacks the tax ratables to pay for its own schools.

For that reason, suburban taxpayers will pick up 100 percent of the cost of building that new high school as well as tens of millions for other school projects.

As for a certain Hoboken resident named Jon Corzine, he won't be contributing a cent, at least not through his property taxes.

I learned the other day that Corzine, who now rents an apart ment in Hoboken, is considering buying a condo in a luxury building called "The W."

"He hasn't made up his mind," said spokesman Anthony Coley. But Coley confirmed that the W looks good to the guv.

It looks good to me, too. The Web site states "The striking 25-story hotel will feature 225 rooms and 37 magnificent condominium residences facing downtown Manhattan ... the new world-class hotel will offer W's sig nature living room experience, a bar with panoramic Manhattan views, a destination restaurant, a 5,000-sq.-ft. bliss spa and fitness facility and more than 11,000 square feet of ballroom and meeting space."

That sounds like quite a crib. But here's the best part: The condo owners won't pay school taxes. That's because the W is being built under a tax abatement agreement. The building won't be subject to normal property taxes. Instead the owners will pay what is called a "payment in lieu of taxation" -- a PILOT for short. And under New Jersey law, PILOT money goes to the municipal government, not to the school district or the county.

That means that suburban taxpayers like me, and perhaps you, will be picking up the tab for such luxuries as the school construction and the free preschools for the working moms of Wall Street who reside in Hoboken. The seven jus tices of the New Jersey Supreme Court have ruled that the funding is required under the state Constitution's guarantee of a "thorough and efficient education."

Actually, the phrase "thorough and efficient education" doesn't appear in the Constitution. Here are some words that do appear: "Property shall be assessed for taxation under general laws and by uniform rules."

This is the so-called "uniformity clause" of the 1947 Constitution. It was inserted because of the exact sort of stunt we're seeing here. Some towns had found ways to have their properties valued at a lower price than their neighbors.' The clause was an attempt to en sure that everyone pays his fair share.

But every law has a loophole. And the loophole here was redevelopment. Legislators decided they would grant limited tax breaks to towns that needed to attract builders to blighted areas.

Hoboken was once blighted. But as Mayor Dave Roberts notes, it is now one of the loveliest little towns in the metropolitan area. From the exquisite views of the Manhattan skyline to the cozy pubs that dot the neighborhoods, Hoboken is just one hell of a nice place to live these days.

So why the tax abatements? Hoboken didn't start that fight, says Roberts.

"Jersey City was tax-abating everything," he told me. "Hoboken was putting its ratables on the board."

Since PILOT money stays in the town, Jersey City was getting out from under its fair share of the cost of county government, the mayor said. It had gotten to the point where tiny Hoboken was paying half as much county tax as Jersey City.

So the PILOTS took off.

"We can't just keep putting properties on line," he said. "Until everyone stops, we must aggressively get involved in this. If the government wants to stop PILOT payments, then everyone would have to stop at the same time."

That's eminently sound advice. But when those joint legislative committees on taxation met last year, their discussions of the unifor mity clause centered mainly on developing new ways to get around it. Not a day goes by in Trenton without the urban Democrats devising new ways to squeeze suburbanites.

The rationale is that the cities lack the ratable base to pay for their own services. But they're never going to get the ratable base as long as they can continue to grant exemptions from property taxes. And so we suburbanites will continue to subsidize the so-called "poor school districts" that receive the Abbott largesse.

Well, most of the towns in the state would be "poor" if they could hide their ratables from the taxman. Corzine's new crib will no doubt have a great view of Manhattan, but the governor sure has a hard time seeing the problems right under his nose.

Paul Mulshine may be reached at pmulshine@starledger.com.


© 2007 The Star Ledger
© 2007 NJ.com All Rights Reserved.

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Amid public doubt, Assembly eyes property tax cut plan
By TOM HESTER Jr.
Associated Press Writer

January 28, 2007, 11:12 AM EST
TRENTON, N.J. -- Plans that aim to give most New Jersey homeowners a 20 percent property tax cut and hold future property tax increases to 4 percent are expected to be considered Monday by the Assembly, though lawmakers haven't had much time to review the plan.

Monday will be the first time legislators consider the centerpiece of the half-year effort to cut the nation's highest property taxes, which are twice the national average.

"We are at the threshold of delivering significant relief in tandem with a system of caps to ensure that taxpayer savings do not get eroded over time," said Assembly Speaker Joseph Roberts Jr.

The bill is going straight to an Assembly vote without committee hearings most bills receive, a process that angered Republicans who contend the cut is an election-year gimmick by majority Democrats.

The bill wasn't available as of late Friday and many lawmakers may see it for the first time Monday.

"There's something wrong with this process," said Assemblyman Joseph Malone, R-Burlington.

Under the plan, households earning up to:

_$100,000 would get a 20 percent cut, a $1,200 break for the average homeowner. This would include 1.4 million households.

_$150,000 would get a 15 percent cut, a $900 break for the average homeowner. This would include 300,000 households.

_$250,000 would get a 10 percent cut, a $600 cut for the average homeowner. This would include 200,000 households.

About 1.9 million of the state's 2 million homeowners would get help.

The break will apply to the first $10,000 in property taxes paid.

The cuts are to come as credits to a homeowner's tax bill, replacing rebate checks that delivered up to $1,200 to senior citizens and up to $350 to others last year.

The plan would be paid for with $900 million used on rebates and $1.4 billion collected from the sales tax.

The bill is expected to receive Senate consideration on Feb. 5.

Included in the bill will be a plan to cap annual property tax increases at 4 percent. The levies have been increasing 7 percent per year.

"This one-two punch of relief and cost controls will ensure that savings for property taxpayers will not be compromised over time," said Assemblyman John Burzichelli, D-Gloucester, who first proposed the tax cut last fall.

The cap is opposed by school and local government officials who contend it will lead to service cuts, though it would have exemptions and allow schools and local governments to appeal to the state or voters to exceed the caps. Sixty percent of voters would have to approve.

Assembly Minority Leader Alex DeCroce said the GOP will try to amend the bill to provide a constitutionally guaranteed 30 percent property tax cut for senior citizens and those earning up to $200,000 and a 20 percent cut for all others.

"By constitutionally dedicating the plan we can assure homeowners that this is not a one-year gimmick, but rather lasting, sustainable relief," said DeCroce, R-Morris.

But Burzichelli said the Democratic bill "deserves wide bipartisan support."

"This is a comprehensive plan for providing relief and curbing property tax increases," he said.

The Assembly is also slated Monday to consider bills that would:

_ Create a state comptroller demanded by Gov. Jon S. Corzine. The Assembly approved the post, but must consider Senate changes that critics said weakened the position.

_ Create a commission to annually ask voters to merge towns. The Assembly also approved this bill, but must consider Senate changes.

_ Strip taxpayer-paid pensions and require jail for corrupt public workers. The Senate has approved this.

_ Bar newly elected and appointed officials and workers such as municipal attorneys from receiving taxpayer-paid pensions. The Senate has also approved this.

_ Impose new rules regarding public notice and revising of contracts for school administrators. The Assembly approved the bill, but must consider Senate changes.

DeCroce said Republicans will also try to amend other bills to undo Senate changes.

"Over the last several weeks many of the key reforms have been stripped from this package and this may be our last chance to correct those mistakes," he said.

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NJ property tax reform: What you will and won't be getting
By TOM HESTER Jr.
Associated Press Writer

January 27, 2007, 8:54 AM EST

TRENTON, N.J. -- With all the talk about property taxes, it's easy to get confused about how measures kicked around in Trenton will affect you and your town.

Of course, the main result residents want to see is lower property tax bills, and lawmakers promise that will happen starting when bills go out around August.

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By Feb. 5, lawmakers are expected to approve what has been proclaimed by Democratic legislative leaders as the largest property tax reduction for working families in state history.

But plenty of proposed reforms have fallen by the wayside as the six-month-effort to cut the nation's highest property taxes nears a close. Let's take a look at what's likely to be approved, and what's not:

_ The property tax cut

What you'll get: A 20 percent property tax cut for households earning up to $100,000, a 15 percent cut for those earning up to $150,000 and a 10 percent cut for those earning up $250,000. About 95 percent of state homeowners will get help.

What you won't get: A guarantee that tax cut will always be around. Assemblyman John Burzichelli, D-Gloucester, proposed the cut and wanted to amend the state constitution to safeguard it, but his fellow Democrats said that would restrict flexibility to spend money.

_ The 4 percent cap on future property tax increases

What you'll get: A new restriction designed to quell school and local government spending that has helped increase property taxes 7 percent annually for years. Schools, counties, towns and fire districts will keep this cap in mind when deciding how to spend money.

What you won't get: The proposed cap comes with exemptions and lets schools and local governments seek state and voter approval to exceed it. Gov. Jon S. Corzine concedes the cap likely won't immediately hold property tax increases to 4 percent because generous contracts with public workers must expire first and governments will need time to adjust to the cap.

_ State spending

What you'll get: Corzine and Democratic legislative leaders insist the property tax cut isn't a gimmick. To keep their word, they'll have to consider the impact of spending decisions on property tax relief or they'll risk voter wrath.

What you won't get: A state spending cap. Republicans pushed for a cap to slow new state spending, but Democrats rejected it.

_ School funding

What you'll get: A promise for a new formula to fund public schools, with Corzine intent on sending more money to rural and suburban schools without cutting help for poor city schools.

What you won't get: A firm date for putting this formula into place.

_ Public worker benefits

What you'll get: Revisions to some taxpayer-paid pension and health benefits to newly elected and appointed officials.

What you won't get: Changes to neither benefits for current elected and appointed officials nor, as of now, to unionized state workers. Corzine is negotiating changes with unionized state workers who oppose benefit cuts. He isn't negotiating with local unions, so that's up to local governments.

_ Property tax reliance

What you'll get: Property taxes will continue to pay for most school and local government operations.

What you won't get: A shift to other taxes, such as an increase in the state income tax, or a chance to pay for schools and local governments through other means.

_ State borrowing

What you'll get: Continued state borrowing without voter approval despite a state constitution provision that demands voters approve borrowing. Such court-approved borrowing has helped balloon state debt that will cost New Jerseyans $2.7 billion this year, taking money from property tax relief.

What you won't get: More say in borrowing. Republicans wanted to tighten borrowing restrictions, but Democrats said that would make it hard to take advantage of favorable markets.

_ Town mergers

What you'll get: The chance to vote on whether your town should merge with another to try to cut costs, if a special commission recommends your town be merged.

What you won't get: Any incentive to support a merger. A plan to annually ask voters to merge towns proposed cutting aid to towns that reject mergers, but the penalty was removed. Only two town mergers have taken place in the last 55 years. Both were voluntary.

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N.J. Assembly OKs 20% tax relief
By JONATHAN TAMARI, Gannett New Jersey Bureau
Posted Tuesday, January 30, 2007

TRENTON — Plans for a 20 percent property tax break for most homeowners and a 4 percent cap on annual property tax hikes took their first formal step forward Monday as both measures won approval in the Assembly.

The plan, formally introduced late Friday, was passed, 71-8, after roughly four hours of debate.

"This is a double dose of property tax relief and reform our residents have asked for and so desperately need," said Assembly Speaker Joe Roberts, D-Camden.

The credits and caps are the highlight of Democrats' property tax reform plans after six months of work on the issue. The proposals now head to the Senate, which could vote on the bill as soon as Monday.

The bill was one of several central pieces of property tax reform that won approval during a marathon voting session. The Assembly also approved a ban on dual-office holding, beginning in July, but with exceptions for officials who currently have more than one post. The bill allows dual-office holding lawmakers to move between the Assembly and Senate by 2008. A similar plan is scheduled to come up for a vote Monday in the Senate.

By overwhelming margins, the Assembly also approved some pension reforms, the creation of a state comptroller and stronger penalties for corruption and elimination of some education mandates. The Assembly concurred with Senate changes to bills creating a state comptroller and a study team to recommend municipal mergers. Each of these plans now heads to Gov. Jon S. Corzine for his signature.

Republicans generally supported the bills but said the final versions fell short of the "historic" changes promised last August.

"This is one of our low moments. This could have been and should have been one of our high moments," said Assemblyman Kevin O'Toole, R-Cedar Grove, Essex County. "In your hearts you know we could have done better. But we had to do the political thing."

The tax cap is aimed at preventing property taxes from growing at the 6 to 7 percent clip seen in recent years, but Gov. Jon S. Corzine said it will take time for the limit to have a significant impact, due largely to existing contracts and pension obligations. "In the first year I don't think it will be a great break from the 6 to 7 percent, but then it should be moving down each year," Corzine said.

The cap allows exceptions for some spending, including debt, capital projects and some health insurance costs.

The dual-office holding ban, approved in the Assembly by a 78-1 vote, would "grandfather" in officials who hold more than one office on July 1. Assembly and Senate lawmakers who currently hold two or more offices could change houses and keep both jobs until 2008.

Contact Jonathan Tamari at jtamari@gannett.com

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GOP objects to new prop. tax relief plan
01/31/2007

By CHARLES WEBSTER

Staff Writer

TRENTON -- A day after Assembly Democrats pushed through a property tax relief plan without public scrutiny or the routine committee vetting process, GOP lawmakers say the bill "blatantly violates the state constitution."

"The state constitution requires that all homeowners be treated equally under the property tax laws," Assemblyman Rick Merkt, R-Mendham, said at a State House press conference yesterday. "But the bill excludes many homeowners based on their incomes. This unconstitutional exclusion threatens property tax relief for everyone in New Jersey."

Republicans are basing their objection on the Uniformity clause of the state constitution which mandates that property taxes must be assessed under "uniform rules."

The measure that passed the Assembly by a 71-8 vote on Monday night provides for a 20-percent credit on property tax bills for people making less than $100,000 annually with decreasing increments for people making under $250,000 annually. Anyone making $250,000 or more annually would not be eligible for any property tax credits.

Republicans argue that the income provision will not pass a constitutional challenge, and that they want to see the plan fixed not scuttled.

If the plan were signed into law, two people living in similar homes would pay differing property tax bills. A person making an annual salary of $99,000 would pay less property taxes than his next door neighbor who makes $101,000 annually, despite living in exactly the same home.

"The Democrat’s plan looks at the characteristics of the property owner, not at the property the taxes are being paid on," explained Merkt. "That’s not property tax reform -- that’s another way of taxing income."

Democrats countered by charging Republicans are trying to derail the property tax reform plan.

"They (Republicans) claim the graduated income standard is unconstitutional, yet it is the same standard used for the existing rebate plan, the same standard used for income taxes and the same standard that is needed to help working families in New Jersey," Assemblyman and State Democratic Party Chairman Joe Cryan, of Union, said in a press release responding to the GOP lawmaker’s concerns. "It is a standard of fairness based on ability to pay."

But Republicans argued they arenot interested in derailing the plan -- just fixing it.

"We’re certainly not here to block property tax relief," said Assembly Republican Leader Alex DeCroce, of Parsippany-Troy Hills. "There is time to do the right thing, and for the sake of all taxpayers, We hope they don’t squander the opportunity."

Yesterday, DeCroce fired off a letter to Gov. Jon Corzine asking for his "personal intervention" to ensure relief efforts are not derailed by requesting the Attorney General "render a formal legal opinion so constitutional issues can be addressed."

As it stands today, the bill would need to fixed in one of two ways, according to the GOP lawmakers.

First, there would need be a constitutional amendment to change the uniformity clause.

Secondly, GOP lawmakers said the bill could be fixed to conform with the uniformity clause by making the provisions of the measure apply to everyone equally across the board by making the tax relief available to everyone in the state without looking at the income level of taxpayers.

DeCroce argued the problem would have been discovered earlier, and before the vote was taken on Monday, if Democrats asked for a review by the Attorney General’s Office, and if there had been a vetting by the non-partisan Office of Legislative Services. But no formal request was ever made of OLS by the Democratic leadership in the Assembly, according to the GOP, and there was no vetting process for the measure, after it was introduced late Friday evening and voted on by the Assembly on Monday.

"They (Democrats) did this during the Florio years, and they are doing it now," DeCroce said. "The only thing missing is Hands Across New Jersey.

"The bill was never given the proper time to be addressed by the people," DeCroce said.

The measure is expected to be voted on by the full Senate soon, before heading to the governor’s desk for his signature.

Charles Webster is the State House reporter for The Trentonian. He can be reached at cwebster4@trentonian.com


©The Trentonian 2007

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Property taxes balloon despite push to reform
Average bill in N.J. increases 6.8%
Sunday, January 07, 2007
BY JOE DONOHUE AND ROBERT GEBELOFF
Star-Ledger Staff

As lawmakers scrambled to enact a property tax reform plan last year, the problem grew by a record $1.4 billion, a Star-Ledger analysis has found.

Local government agencies hit landowners with a $20.9 billion levy in 2006, of which $15.4 billion was billed to homeowners. That pushed the average residential tax bill up 6.8 percent to $6,170 -- an increase of $390.

In the mid-1990s, the state's property tax levy -- the total amount collected to run local government and schools -- took three years to rise by a similar amount. But with costs increasing and aid from Trenton relatively flat, local officials have passed more than a billion dollars of their costs onto landowners every year since 2002.

The largest increase prior to 2006 was $1.2 billion in 2003.

State leaders say they are painfully aware taxpayers are feeling the pinch and that they must act soon to adopt both immediate relief and longer-lasting reforms.

"It's got to get done, plain and simple. No ifs, ands or buts about it. The quicker the better," said Senate President Richard Codey (D-Essex), who said he hopes a comprehensive set of reforms can clear the Legislature within six weeks.

In 2000, only six communities had an average property tax bill over $10,000. Now, homeowners in 55 towns can expect to pay five-figures to support schools, police and other local services, according to the analysis.

The average annual tax increase in the state has hovered between 6 and 7 percent for five years now, more than double the rate of inflation -- a trend that Jerry Cantrell of Randolph finds "completely unacceptable."

"Given they are more than double the cost of living increase, this policy is effectively creating a statewide inflation spiral," said Cantrell, president of Silver Brigade, a mostly senior citizen group dedicated to property tax reform. "Our government continues to spend at rates outpacing the private sector and the nation as a whole while private sector salaries are remaining relatively flat."

Assembly Speaker Joseph Roberts (D-Camden) said the relentless increase shows the need for a 4 percent cap on annual spending. "I know the average property tax bill has been hovering at around $6,000 for a number of years and that is clearly moving in the wrong direction. I think more than anything this shows the need to cap the growth in government spending," he said.

The Star-Ledger analyzed tax rates collected from 21 county tax boards and the tax assessments of more than 3 million individual real estate parcels. Among the other findings:

# More than 273,000 individual homeowners now pay $10,000 a year in property taxes -- up from 72,000 in 2000.

# Homeowners in affluent Millburn pay the highest average bill -- $16,511 -- but the average bill increased by 10 percent or more in 94 towns last year.

# Among municipalities with the 25 highest bills, 10 are in Bergen County, while six are in Essex County. Bergen County residents had the highest average bills -- $8,404 -- with Essex County taxpayers paying only slightly less at $8,262. South Jersey residents received the smallest bills, with taxpayers in Cumberland County paying the lowest average: $3,021.

Since the start of a special session in July, Gov. Jon Corzine and legislators have been wrangling over a plan to provide immediate relief from the nation's heaviest property tax burden while also establishing a long-term strategy for slowing tax increases.

The short-term fix is a tax credit of up to 20 percent for those earning $100,000 or less, with smaller reductions for those earning between $100,000 and $250,000.

With all 120 lawmakers seeking reelection this year, Roberts said the Democratic majority hopes to enact the tax credit soon, even though Corzine has expressed concerns about how to pay for the $2 billion-a-year program in the future.

"We are looking for this to be passed in the Legislature early in the year," Roberts said. "People will see relief in their August tax bill. That is our plan."

A Corzine spokesman said The Star-Ledger's analysis reinforces the governor's belief in the need for a cap on yearly property tax increases.

"These numbers are exactly why Governor Corzine has been fighting for a 4-percent cap on annual increases," said spokesman Anthony Coley. "A 4 percent cap will make property tax reform sustainable and lasting, and New Jersey homeowners deserve and expect just that."

Lawmakers will act on other parts of the property tax plan as early as tomorrow, when the Assembly takes up bills to encourage local consolidation, including a commission to encourage mergers of municipal services, and the creation of an independent state comptroller.

Republicans eager to win back one or both houses made it clear they will keep the heat on until something gets done.

"The Legislature promised New Jersey property tax relief but failed to enact any substantial reform," said Assemblyman Guy Gregg (R-Sussex). "Where is the alleged relief everyone was supposed to get?"

William Dressel, executive director of the New Jersey State League of Municipalities, said the 6.8 percent increase in property tax bills did not surprise him. He credited local officials with preventing taxes from climbing higher given that municipalities have received little new state funding for five years; during that time, insurance costs have soared and police and fire salaries have risen about 4.5 percent annually.

"On the one hand, they say we must run municipal government in a smart business-like fashion and on the other hand, they hamstring us with level funding and they do nothing legislatively to deal with the cost-driving issues," Dressel said.

Former state Sen. William Schluter (R-Hunterdon), co-chairman of Citizens for the Public Good, a coalition of good government groups that support a citizens property tax convention, said a convention is the only hope for real reform. Even a 20-percent credit is unlikely to calm taxpayers for very long, he said.

"They will change property taxes to what they were three years ago," Schluter said. "Were people happy with their property taxes three years ago? No."

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Tax cut plan not creditable
Posted by the Asbury Park Press on 02/2/07

New Jersey property taxpayers are being promised what Assembly Speaker Joseph J. Roberts Jr. this week called a "double dose of property tax relief and reform." Don't expect that double dose to be the cure for what ails you and your bank account.

Gov. Corzine should tell Roberts, D-Camden, and Senate President Richard J. Codey, D-Essex, to get their colleagues back into the Statehouse and try again. The relief and reform efforts fall far short of what New Jersey's taxpayers need and expect.

A plan that passed the Assembly Monday calls for 20 percent property tax credits for homeowners who earn less than $100,000 per year — 15 percent and 10 percent for higher-income households — and a 4 percent cap on annual tax hikes that's riddled with exemptions.

Problem is, when you offset the tax credit with the increase in other taxes and fees and the loss of the Homestead Rebate, you will see only a fraction of the 20 percent in relief. And the 4 percent cap is actually higher than the caps now in effect for municipalities (2.5 percent) and school districts (3.5 percent or the rate of inflation, whichever is higher). The exemptions on those caps have made them largely meaningless. Tax bills have continued to rise about 7 percent a year.

Here's the math on the proposed "tax relief": A family paying the state average of about $6,000 in property taxes would get a 20 percent credit of $1,200. Last year, the average homeowner received a $285 rebate that it won't get this year. Subtracting that reduces the tax relief to $915 — about 15 percent of the tax bill. Gov. Corzine said even with a 4 percent cap, homeowners could probably expect a 6 percent to 7 percent local tax increase next year. A 6.5 percent rise would add $390 to the tax bill, further reducing the "relief" to $525, or under 9 percent.

From that figure, subtract the 16 percent increase in the sales tax, which went into effect in October, that will likely fund most of this year's property tax credit. The state estimates it will cost the average family an additional $275 per year. That brings the so-called relief for the average taxpayer to $250 — whittled down to a mere 4.1 percent.

None of that takes into account the annual rate of inflation — likely more than 3 percent — or the myriad "nuisance" and "sin" taxes heaped on New Jersey residents over the last several years. If you think you're getting any relief, we've got an about-to-be-torn-down-and-rebuilt-at-taxpayer-expe nse bridge to sell you.

Legislators admit they're concerned about how they will continue to pay for the tax credits after the first year. Until Trenton learns to cut and curb its spending habits, New Jersey residents can only expect more of the election-year spin that promises to give taxpayers more of their money back while they are actually paying out the same amount, or more, elsewhere. That kind of "relief" is why tens of thousands of New Jersey residents are growing sick of living here and are relocating to states with fiscally responsible legislators.

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