Christie urges sweeping changes to cap property taxes

TRENTON - Gov. Christie unveiled a sweeping package of proposals Monday aimed at solving the state's "property-tax crisis," minutes after Democratic legislative leaders proposed reinstating an income-tax surcharge on residents who earn more than $1 million a year.

On a day of especially sharp exchanges among political leaders, and with the deadline for a completed state budget less than two months away, the governor said his plan would require passage of 33 pieces of legislation. At its heart: a constitutional amendment to place a 2.5 percent cap on increases in property-tax levies for municipal, school, and county taxes.

Governments could exceed the cap with voter approval; the only other exception would be for debt-service payments. Currently, the state has a 4 percent cap, but many more exceptions are permitted.

The legislation, Christie said, "will for the first time deal with the root causes of New Jersey's property-tax problem." Property taxes in New Jersey are among the highest in the nation.

"We cannot any longer have business as usual in this town," Christie said. "We believe these reforms present us with both a unique opportunity and a unique solution to finally getting at the root of the things" that can make New Jersey unaffordable.

Other bills in the package would cap state spending, excluding aid to municipalities and school districts and direct property-tax relief, at 2.5 percent; prevent arbitrators from awarding contracts that exceed 2.5 percent, including salaries, benefits, and other economic compensation; allow counties and municipalities to opt out of civil service; and move school and fire elections to November.

Democratic legislative leaders, meanwhile, announced a proposal to reinstate an income-tax surcharge on those who earn more than $1 million annually, with the proceeds to benefit the elderly and the disabled. Under Gov. Jon S. Corzine, the surcharge applied to those earning more than $400,000.

Senate President Stephen Sweeney (D., Gloucester) and Assembly Speaker Sheila Oliver (D., Essex) said Christie's calls for "shared sacrifice" in solving the state's fiscal problems rang hollow because he has not called for the wealthiest New Jerseyans to contribute.

Sweeney, Oliver, and other Democratic legislative leaders said their proposal would increase the marginal income-tax rate on those earning more than $1 million from 8.97 percent to 10.75 percent, the same rate they paid last year under Corzine. The legislators estimate the proposal would affect the 16,000 wealthiest New Jerseyans and raise an estimated $637 million, a figure that was confirmed by the nonpartisan Office of Legislative Services.

Democrats proposed using the revenues raised from the surcharge to eliminate Christie's proposed $310 deductible on senior citizens and the disabled enrolled in two state prescription drug programs and to reverse his plan to increase prescription drug co-payments in those plans. The Democratic proposal would also restore property-tax rebate checks for senior citizens and the disabled to last year's levels.

"From Day One, the governor's plan to protect the rich from any of the pain being delivered by his budget has flown in the face of both common sense and common decency," Sweeney said. "This plan re-centers our priorities."

Oliver said the plan would allow the 16,000 most fortunate residents in the state to help more than 600,000 senior citizens and disabled residents struggling to make ends meet.

"We have made it very clear that we will work with the governor to solve our budget problems, but Democrats will not do so at the expense of elderly New Jerseyans," Oliver said. "This plan spreads the pain and protects our most vulnerable."

Christie said that while he was willing to entertain suggestions for changes to his tool kit, he has no interest in increasing or reinstating taxes of any kind, although his budget does include fee increases.

"Let me be real clear on it," Christie said. "They can call it whatever they want to call it. They can package it however they want to package it. They can send it to me with a bow on it. They can send it to me in a nice box, gift-wrapped. They can throw it over the transom and leave it there and hope nobody smells it.

"No matter how they send it to me, it is going back. It is going back with a veto on it. We are not raising taxes in the state of New Jersey this year."

Regarding the specifics of the Democratic proposal, Christie said, "Their math doesn't work. It's a cute idea, but their math doesn't work."

Public employee unions responded swiftly and negatively to Christie's proposal.

Hetty Rosenstein, New Jersey state director for the Communications Workers of America, called the governor's proposed legislation "a Molotov cocktail for workers' rights."

"Taking away neutral arbitrators, ending appeal rights, and giving politicians the right to protect politically connected hacks instead of civil servants from layoffs would set back New Jersey's tradition of fair labor practices 50 years," Rosenstein said.

The New Jersey State Policemen's Benevolent Association said it has "serious concerns" about the 2.5 percent property-tax cap.

"A hard limit on how much a community can spend on its essential services will force municipalities to cut law enforcement jobs and scale back policing efforts," the PBA said in a statement, noting that in Massachusetts, where a similar property-tax cap has been in place since the 1980s, police departments have sustained significant numbers of layoffs.

Some local officials from South Jersey applauded Christie's proposal.

"I think the [proposal] Christie is coming out with today is giving municipalities the tools to stay within the 2.5 percent levy cap, which is something the prior administration didn't exactly have," said Mount Laurel Manager Jennifer Blumenthal.

Dan Keashen, chief of staff to Cherry Hill Mayor Bernie Platt, said the township supported the 2.5 percent cap on annual raises. The township is trying to negotiate a contract for police officers, who were entitled to 4 percent increases under their previous agreement, he said.

Still, Keashen noted that some of the proposals would have no effect on Cherry Hill and that the township was hoping for more reforms that would have a "substantial impact."

Identifying the problems targeted by the tool kit was the easy part, said Bill Dressel, executive director of the New Jersey League of Municipalities. The greater challenge, he said, is winning a consensus on the proposals.

Christie urged lawmakers to take action on his proposals in the next 51 days. The state constitution requires a budget to be adopted by the end of June 30.

The governor's proposals aimed at property taxes include:

A constitutional amendment to impose a 2.5 percent cap on property-tax increases for municipal, school, and county taxes; and a constitutional amendment to place a 2.5 percent cap on spending for state government operations excluding state aid to municipalities and school districts and direct property tax relief.

Barring arbitrators from exceeding a 2.5 percent cap when setting contracts, including all salary, benefit, and other economic contract provisions

Eliminating eligibility for state retirement systems for nongovernment groups and associations, and capping sick leave for current employees.

SOURCE: New Jersey Governor's OfficeEndText