TRENTON - Haven't we been here before?

It's an election year in New Jersey and state lawmakers are offering up a property tax-relief package - one that would dole out an average of $1,051 to 1.9 million households this year.

Authors of the plan, which Gov. Corzine is expected to sign into law, insist this is the real thing: meaningful, long-lasting reform.

But critics swear the program is just another vote-getting gimmick that cannot be sustained over time. And recent history, it seems, is on their side.

Property-tax relief programs have been around for years, after all, and help for homeowners has ebbed and flowed.

In 1999, Gov. Christie Whitman introduced her popular NJ Saver Program, which doled out rebate checks averaging $120 that year and $240 the following year.

In 2001, acting Gov. Donald T. DiFrancesco signed a bill that accelerated the program, doubling most payouts to $500.

In 2003, under Gov. Jim McGreevey, the checks dropped to $250. But the next year, McGreevey boosted the rebates again, giving families up to $800 with help from proceeds from a new "millionaire's tax."

In 2005, Senate President Richard J. Codey - then acting governor - said the state's rocky finances could not support such generosity. So although senior citizens were allowed to keep their rebates - up to $1,200 - others saw their tax breaks slashed by more than half, to between $200 and $350.

Now Democratic leaders are proposing jacking up relief levels again as part of a six-month drive to overhaul the country's highest property taxes. Under the proposal, seniors would receive no less relief than they do now, while other households making up to $250,000 would get tax breaks ranging from 10 percent to 20 percent.

Given the past, many have a hard time believing the plan will survive into the future.

"I don't think anybody would project they would get the same [relief] next year," said Ingrid Reed, director of the Eagleton Center for Politics at Rutgers University. "I don't think people believe this is the beginning of routine, sustained commitment from the state. I think the trust needs to be built."

But this time, the plan's backers insist, the relief will stick.

A special provision would help make sure tax increases don't cancel out the relief, either, they say. Under that provision, towns, counties and school districts could not raise property taxes more than 4 percent a year.

Codey said homeowners could count on the tax relief for years to come "unless you have a 9/11, something like that."

What sets this plan apart from years past, Codey said, is the tax cap, which he acknowledged would take a few years to take full effect, but which he said "hopefully will work."

But critics of the plan say lawmakers have allowed local officials to exempt too many costs from the cap. As a result, they say, property taxes, which have been going up by 7 percent in recent years, will continue to rise.

Meanwhile, skeptics fear, the relief could dry up again.

Legislative leaders have proposed funding the $2.3 billion plan this year with more than $1 billion the state currently uses to fund rebate checks, plus proceeds from last year's penny sales-tax hike. Voters last year dedicated half of those new sales-tax proceeds - about $700 million a year - to property-tax relief, and for this year only, lawmakers have two years' worth of that money at their disposal.

In future years, they will have to find hundreds of millions of dollars to fully fund the tax-relief program.

But the fact that there is some money constitutionally earmarked for relief already sets this property-tax effort apart from others, said Assembly Speaker Joseph Roberts (D., Camden).

"We're not saying, 'Take our word for it.' We are saying that we have guaranteed it," he said.

Roberts hopes to dedicate another half-penny of the sales tax to help fund the relief in future years. But even if voters don't make that happen, he said, legislators would find a way to fund the program, which he estimated would be "about $400 million short."

"That is a little more than 1 percent of the state budget," he said. "It's a large number, but in the context of the state budget, it's not an insurmountable problem."

Legislative leaders and Corzine have suggested the state could unload a big chunk of debt - and free up billions it now pays in interest to help fund initiatives such as tax relief - by selling or leasing some of its money-making assets, such as the lottery and three toll roads.

But "asset monetization," which Corzine is now studying, has met with a lot of opposition from skeptics who worry that, among other things, fee levels would rise and service levels would drop under a private operator.

Corzine, who once questioned whether the tax-relief program could be sustained, now believes it could be - with the help of the cap, concessions he hopes to get from public employee unions on pensions and benefits, and savings uncovered by a newly established state comptroller.

Last week, Corzine called the Legislature's approval of the relief plan "a turning point with regard to reform."

But even if legislators do find the money to fund the relief in the long term, "it's still not property-tax reform," insists William Schluter, a former GOP state senator who advocates shifting more of the burden onto the income tax.

When legislators realized their efforts to reduce property taxes weren't working, Schluter said, they passed something "to get them through the next election."

Joshua Berry, chair of South Jersey Citizens for Property Tax Reform, which monitored the effort, agreed, calling the relief "a warmed-over rebate."

Added the engineer from Blackwood: "I'm afraid the leaders of the Legislature will pass this, the governor will sign this, and they'll wash their hands and say they're done, and in two years, we'll be back in the same position."

Trenton's Property-Tax Overhaul Effort Tax-Credit Plan Highlights

This is what came out of a six-month effort to reform America's highest property taxes.

On Gov. Corzine's desk

The major piece of the effort, a bill creating a 20 percent property-tax credit for most households and a 4 percent cap on local tax increases.

A bill establishing a state comptroller who would investigate and audit governments. The office could cost the state up to $9 million annually, and critics say its power has been watered down; Corzine says it will have strong authority to root out waste, thus eventually saving millions.

A bill that would require elected or appointed officials who are convicted of a crime to forfeit their retirement benefits from the job in which the offense was committed.

A bill that would create a panel to recommend town mergers subject to voter approval; lawmakers removed a provision that would have withheld some aid to towns who voted down the mergers.

A bill that would establish accountability measures for schools, such as restrictions on travel expenses.

In the Legislature

A bill giving county superintendents authority to eliminate nonoperating school districts and recommend mergers among local districts subject to voter approval; it also eliminates some barriers to consolidation and requires user-friendly budgets. Senate passed, Assembly expected to pass.

A bill making some changes to pensions and benefits for elected and appointed officials. Senate passed, Assembly expected to pass.

Signed into law

An elimination of some school mandates viewed as expensive or unnecessary.

An elimination of inactive commissions and boards.

Dead or postponed

A new school funding formula that was to have directed more money to middle-class suburban districts. Corzine has pledged to raise those schools' funding anyway, but he said the formula cannot be ready in time for this school year.

A proposed pilot program that would have created a countywide school district to study whether it would lower school costs. Gloucester County lawmakers killed the bill after around 3,000 people protested it at a Washington Township school board meeting.

A ban on holding more than one elected office, exempting the Legislature's 19 current dual office-holders. The Senate and Assembly disagree over when it should take effect, but legislative leaders and Corzine say it is still a priority.

Changes in unionized public-worker pensions and benefits, including prohibiting employees from earning pension credits for more than one job, requiring them to forfeit their pension if convicted of abusing their office, and eliminating a sick leave and injury program. Corzine ordered lawmakers to pull these out of the bills, saying he wanted to handle them in union negotiations.

Moving fire district and school board elections to November to increase voter turnout and save costs. The Senate threw that out of a consolidation bill.

A bill that would have eventually consolidated property assessment on the county level, eliminating municipal assessors. It did not get enough legislative support.


Who would get what

Households making $100,000 or less a year would get a 20 percent break, to a maximum of $2,000.

Households making between $100,000 and $150,000 would get a 15 percent break, to a maximum of $1,500.

Households making between $150,000 and $250,000 would get a 10 percent break, to a maximum of $1,000.

Households making more than $250,000 would get no tax relief.

The credit would apply only to one primary residence.

Cost to the state

About $2.3 billion in 2007.

When the cut could take effect

Possibly in time for summer property-tax bills.

How it could be administered

Officials hope to provide direct credits on tax bills, but for this year may have to send rebate checks.

How it could affect current rebate checks

The credits would replace the rebate program. Under that program:

People who are 65 or older or are disabled and make less than $70,000 get a rebate of $1,000 to $1,200; those making $70,001 to $125,000 get $600 to $800; and those making $125,001 to $200,000 get $500.

People younger than 65, not disabled, and making less than $70,000 get a rebate of $350; those making $70,001 to $125,000 get $250; and those making $125,001 to $200,000 get $200.

Seniors and the disabled who now get more than a 20 percent tax break would receive the same level of relief.

How it could affect tenants

The bill proposes doubling the relief earmarked for tenants from $126 million to $252 million.

Property-tax cap

The same bill also prevents local taxing authorities such as towns, counties and school districts from raising taxes by more than 4 percent annually. Exempt from the cap calculation would be several fixed costs, including debt service and some health-care costs. As a result, critics say the cap would not be effective, but proponents say the cap would keep taxes - now rising 7 percent annually - more in check.


Contact staff writer Jennifer Moroz at 609-989-8990 or