Property Taxes - Ledger - Clash of competing agendas

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Published in the Star-Ledger, Sunday, July 23, 2006

The giant stakes in property tax debate
Lobbies await clash of competing agendas

BY TOM HESTER AND JOE DONOHUE
Star-Ledger Staff

It is billed as the best hope to reduce the property taxes that have bedeviled New Jerseyans for decades.

But political leaders agree this summer's special session on property tax reform -- which Gov. Jon Corzine will kick off with a speech Friday -- will feature far more than a well-meaning discussion of tax policy.

Trenton's biggest guns -- powerful unions, business interests, citizens groups and representatives of schools and towns -- are already digging in for what some say could be the biggest lobbying effort ever at the Statehouse.

"It has started," said William G. Dressel, director of the New Jersey State League of Municipalities, which represents 566 towns and cities. "I would say the lobbying is more intense now than I have ever seen it in my entire career (32 years), from almost every interest group I can possibly think of."

One big reason: Schools and local government are a $34 billion business in New Jersey -- more expensive than the state budget -- and many benefit from the current system.

Taxpayers chip in more than $19 billion in property taxes, and the state doles out nearly $15 billion in aid to schools and towns and in rebates to taxpayers. All will be in play as lawmakers discuss changing a system that produces the nation's highest property taxes.

Each solution -- from cutting the cost of local government to finding other ways to pay for it -- affects major special interests.

"It is not possible to do a fix without bringing about substantive change, and that is going to have winners and losers, or perceived winners and losers," Corzine said last week during an editorial board meeting at The Star-Ledger.

Asked where lobbying pressure can be expected to come from, the governor said: "Everywhere. Towns, communities, firefighters, police officers, officeholders ... "

Last year, groups with a keen interest in the debate spent nearly $5 million on political contributions to state candidates or to push bills they favored.

"This is going to be a test of whether anything significant can be done," said Bill Schluter, a former state senator and a member of the Citizens Convention Coalition. "Some people's oxen are going to be gored, and these are people who fund elections."

Many want to protect what they have. Labor interests, including the powerful teachers union, the New Jersey Education Association, worry about losing jobs if towns or schools merge to save money. They vow to defend their pensions and benefits.

Others are pressuring lawmakers for change. Citizens groups -- including the senior citizens lobby, always a force in New Jersey -- say property taxes are an issue Trenton can no longer ignore.

And there are those who worry that shifting the property tax burden to other taxes could hurt them.

Here's a lineup of the interests in the property tax debate:

New Jersey Education Association: The 192,000-member teachers union contributed $355,310 to state candidates and spent $249,750 on lobbying last year.

With school spending a major issue, the NJEA vows to protect its members' jobs, salaries and pensions. It supports a proposal by Assemblyman Louis Manzo (D-Hudson) to shift more of the property tax burden to other taxes. It strongly opposes reducing funding for schools.

Communications Workers of America: The union for 40,000 state and 20,000 local government employees contributed $626,673 to state candidates and spent $127,037 on lobbying last year.

It opposes requiring new public employees to pay into their retirement plans or for part of their health insurance. It says any change in benefits must be worked out in contract bargaining. It insists that union leaders play strong role in talks involving regionalization or major shared services. It favors cracking down on pension padding and dual office-holding by politicians.

New Jersey State Police Benevolent Association: Representing 350 PBA locals statewide, it contributed $130,705 to state candidates and spent $76,725 on lobbying last year.

It opposes any move to alter police benefits, noting that its members already put a higher percentage of their pay into their retirement system than other public employees in the state.

Association of School Administrators: Lobbying for 1,000 school administrators and officials, it spent $101,493 last year.

It supports a new school funding formula and some form of new taxation for school costs. It says it is "always on guard" against changing how administrators' contracts and benefits are determined.

New Jersey School Boards Association: It lobbies for 612 school boards and 4,800 members.

It says property taxes and school-funding relief should be achieved through "predictable revenue sources." It opposes making school districts join a state health insurance plan, arguing school boards can negotiate cheaper contracts.

New Jersey State League of Municipalities: It spent $423,530 last year lobbying for the state's 566 cities and towns.

It wants tax reform proposals to be determined ultimately by a citizens convention and public vote. It is interested in allowing towns to raise money through a local sales tax. It supports making new public employees pay part of their health insurance and pension. It says regionalization or sharing efforts must be voluntary.

Citizens Convention Coalition: A group of 13 good-government organizations -- including Citizens for Property Tax Reform, League of Women Voters, and Latino Alliance -- it wants a citizens convention to develop tax reform proposals and give voters the final say. It supports cutting government spending through regionalization and shared services, and requiring public employees to help pay for their medical insurance.

AARP of New Jersey: Representing 1.4 million senior citizens, who turn out in large numbers to vote, it spent $624,469 on lobbying last year.

It says New Jersey relies too much on property taxes, which it notes are not based on ability to pay and thus are squeezing senior citizens and others. If special session falls short, it wants a citizens convention to propose reform.

Black Ministers Council of New Jersey: Composed of ministers from 600 black churches, it supports examining school funding and increasing aid to financially struggling school districts that border the poor inner cities. It supports encouraging regionalization and shared services. It wants the property tax burden distributed more equitably between the wealthy and less-affluent towns.

New Jersey Builders Association: The trade organization for 2,000 developers and builders contributed $73,650 to state candidates and spent $606,981 on lobbying last year.

It supports lowering property taxes but opposes any move to place additional taxes and fees on builders.

It is closely aligned with the business, industrial park, real estate and contractor lobbies.

New Jersey Business & Industry Association: It lobbies for 23,000 businesses and industries. It contributed $261,400 to state candidates and spent $237,229 on lobbying last year.

It opposes any effort to shift the tax burden toward businesses. It supports changes in school funding. It is interested in the idea of municipal sales taxes. It supports regionalization and shared services, especially for school districts. It also supports public employees paying for part of their health insurance. It opposes a citizens convention, which it worries might tinker with business taxes.

Staff writers John Mooney and Jeff Whelan contributed to this report.

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