BY ASSEMBLY REPUBLICAN LEADER ALEX DeCROCE
AND SENATE REPUBLICAN LEADER LEONARD LANCE
Property taxes are the curse of living in New Jersey, and last fall’s special legislative session did little to relieve the suffering.
Senate President Richard Codey and Assembly Speaker Joseph Roberts recently published the column in various newspapers defending the recently adopted property tax “reform” package passed by the Legislature and signed into law by Governor Jon Corzine.
While the Democratic leaders of our respective houses in the Legislature seem pleased with the property tax reform program they have created, we believe the taxpayers of New Jersey will soon see this as another election-year gimmick that ignores the fundamental factors that are driving up tax rates and making our state increasingly unaffordable for middle-class residents.
It was our hope when the Legislature embarked on last summer’s property tax reform special session that it would result in the substantial and lasting property tax relief that Democrat leaders had been promising for five years.
But it soon became apparent that the process was not going to produce the real reform that was necessary to provide long-term, substantial tax relief to our state’s beleaguered property taxpayers.
For several months, Democrat lawmakers chipped away at the many worthwhile reform proposals that had been issued by the special session committees last November. By the time the bills were drafted and voted on in the Legislature this January and February, we were left with little to show for last summer’s hearings.
When the four property tax reform committees issued reports in mid-November, they made 98 recommendations that could have resulted in as much as $2 billion in savings.
In the months following the release of those reports, the Democrat majority repeatedly took steps to scale back the reform proposals. First, the proposal to eliminate dual-office holding was squashed. Then a group of Hudson County legislators successfully fought to limit the authority of a new state comptroller by prohibiting the comptroller’s office from looking into spending by municipalities or school districts.
The direct property tax relief that was put on the table for New Jersey’s taxpayers at the end of the process also falls well short of what is needed to stem the recent surge in property tax bills, which rose by more than 7 percent last year and are likely to rise by at least that amount this year.
Under the Democrat?s plan, some taxpayers will see no relief at all, while others will see so little relief that their property-tax credit will be less than the increase in their property tax bills this year alone. Seniors and two-income middle-class families may not see any more relief than they get under the existing rebate program.
Property taxes have increased by an average of 36 percent statewide over the past five years. The Democrat tax “relief” plan will provide only a 20 percent reduction for families earning less than $100,000 in combined income. If your household income is more than $100,000, Democrat leaders consider you “rich” and you will get only a 15 percent cut.
Those families that earn more than $150,000 receive just a 10 percent cut, and those earning more than $250,000 get no relief. Meanwhile, most senior citizens who already get $1,200 through the Homestead Rebate program will see little or no additional relief.
Democrats have been promising, over the past five years, to deliver a permanent means to lower property taxes. The current plan falls well short of that goal. In fact, for taxpayers in 491 municipalities, the average tax credit will not cover the increase in property tax bills since Democrats took control of state government in 2002.
Republicans in the Assembly had proposed a constitutionally dedicated 20 percent, across-the-board property tax cut with a 30 percent cut for seniors and families earning less than $250,000. This would have been substantial relief for all homeowners. And it would have been sustainable because we intended to fund it through $2 billion in spending cuts we outlined during the budget process. The Democrats voted down this legislative proposal.
Instead, the plan the Democrats adopted — which provides much less substantial relief — will have to be funded using two years’ worth of revenue from last year’s sales tax increase. In reality, New Jersey taxpayers are financing the minimal tax relief they are slated to receive from this program through the higher sales taxes they have been paying since last October. This means that there is no funding source to sustain the program beyond this year.
With so many cost-saving reforms cast aside, and the Democrats choosing to fund the relief through tax-hike revenue rather than cuts in wasteful government spending, this may end up being a one-time, election-year gimmick. The property tax relief could vanish after next January.
We had an opportunity to provide meaningful, lasting property tax relief. The Legislature could have done better, but the Democrats were content to settle for half-measures and watered-down reform. We on the Republican side of the aisle — including those who voted for it because it was the only property tax relief plan Democrats were willing to consider — will continue fighting for real reforms that will provide substantial property tax relief that homeowners can count on in the future.