Monday, July 24, 2006

Joe Roberts - Courier - Tax relief: Light at end of tunnel

Published in the Courier News, Sunday, July 23, 2006

Property tax relief is light at end of tunnel

The shutdown of state government earlier this month was a dark chapter in New Jersey history that left many of our residents wondering, "Why?"

Why did Atlantic City's casinos close for the first time in their 28-year history? Why were countless citizens inconvenienced as racetracks closed and the state lottery stopped selling tickets? Why were thousands of people put out of work -- either directly or indirectly -- as the state budget process barreled past the June 30 constitutional deadline for enacting a new fiscal plan?

The answer to these questions centers on the most pressing problem facing New Jersey: record-high property taxes.

New Jersey's property taxes are 50 percent above the national average, giving us the ignominious distinction of having the highest property taxes in the entire country.

Although nearly half of New Jersey's $30.9 billion budget already is used to help offset property taxes, it simply is not enough. Unless action is taken -- and taken immediately -- property taxes will continue to strangle the citizens of this state.

That is why Assembly Democrats advocated so forcefully for the principle that every dollar of the recent sales tax increase be dedicated for driving down property taxes rather than supporting the state budget. Assembly Democrats believed the budget could be responsibly balanced with additional spending cuts and alternative revenue raisers, which would enable a penny sales tax increase to be set aside exclusively for property tax reform.

The Assembly Democratic sales tax position was at odds with the budget design of Governor Jon S. Corzine, who entered office with more credibility on financial issues than perhaps any elected official in state history. The governor strongly felt that the sales tax was a stable and recurring source of revenue that should be used to address the structural problems that have plagued past state budgets.

His motivations were pure and driven by a fundamental desire to change a process that in previous years led to ugly and irresponsible ways of appropriating state money.

When consensus between the governor and the Legislature on the sales tax increase could not be reached by the constitutional deadline for balancing the budget, the state was forced to shut down.

Was the shutdown a regrettable turn of events that disrupted the lives of countless New Jerseyans? Yes, and the people of New Jersey are owed an apology because of it.

But the compromise reached by the governor and the Legislature to end the budget impasse is a fair one. It is a solution that acknowledges the severity of the property tax crisis New Jersey faces, sets aside billions of dollars in future funding to help address it and still balances the budget in a responsible manner.

Under the compromise that ended the shutdown, half of the governor's penny sales tax increase will be used to balance this year's budget and fund existing property tax relief programs; the other half of the penny will be placed in an escrow fund for future property tax reform.

Moreover, the Legislature is expected to pass a measure allowing voters to decide this November whether half of the penny increase should be permanently and constitutionally dedicated to address property taxes instead of being used solely as "one-shot" relief in this year's budget. The administration indicates this constitutional dedication will translate to a minimum of $7 billion during the next decade.

Beyond this year, it is my intention to ensure that the entire sales tax increase is constitutionally and permanently dedicated to offsetting high property taxes. Gov. Corzine, as part of the budget compromise, committed to making it his "absolute goal" to have the entire sales tax increase dedicated to property tax reform by next year provided the state's fiscal house is in order.

The work to make this goal a reality should begin this very month, when the Legislature initiates a landmark special session on property taxes.

New Jersey's homeowners don't get a summer vacation from high property taxes, and the Legislature shouldn't get one, either.

The special session will focus on making structural government reforms, such as ending abuses of the public pension and health benefits system, and encouraging neighboring municipalities to save money by regionalizing and sharing services. Lawmakers also will consider long-term property tax reforms, such as revamping our school-aid formula and considering a citizens' constitutional convention on property taxes.

When I was sworn in as Speaker Jan. 10, I indicated that property taxes would be the General Assembly's top priority. I said this again May 10, when I announced the Assembly's "CORE" reform plan to examine new ways to achieve savings through local government sharing and efficiency. I said it again June 6, when Senate President Richard Codey and I announced the historic special session of the Legislature to deal with property taxes. And I said it every single day in July during the shutdown of New Jersey's government.

The state shutdown now is behind us, but true property tax reform will remain the No. 1 priority of the General Assembly until New Jersey residents are relieved of this oppressive burden in a large and lasting way.

Joseph J. Roberts Jr.
Mr. Roberts is Speaker of the Assembly [DD]

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Plainfield resident since 1983. Retired as the city's Public Information Officer in 2006; prior to that Community Programs Coordinator for the Plainfield Public Library. Founding member and past president of: Faith, Bricks & Mortar; Residents Supporting Victorian Plainfield; and PCO (the outreach nonprofit of Grace Episcopal Church). Supporter of the Library, Symphony and Historic Society as well as other community groups, and active in Democratic politics.