Share this
Twitter
Myspace
Digg
Del.icio.us
Reddit
Slashdot
Furl
Yahoo
Technorati
Newsvine
Facebook
Export PDF
Print
E-mail
Tags
BY REED GUSCIORA
COMMENTARY
After slashing aid to municipalities by $445 million, Gov. Chris Christie has offered them "tool kits" to cushion the blow of expected property-tax increases. A "tool kit," however, implies pocket wrenches or screwdrivers to tinker with a problem until a professional arrives.
Democrats should toss the tool kits and instead offer a jackhammer to restructure the way we fund local government services, which are now based on property taxes. In essence, the governor's plan calls for a 2.5 percent cap on increases in local property taxes. But if you can't afford to pay property taxes now, does it really matter that they can only go up another 2.5 percent?
Citizens do not need a cap. They need a rollback.
New Jersey property taxes are the highest in the nation. In 2009, the average property tax bill was $7,281. In 2008: $7,045; and in 2007: $6,610, while the nation's average was $4,283. Moreover, New Jersey is home to seven of the top 10 counties in the country with the highest median property tax. Ninety of our municipalities have an average levy topping $10,000, and an additional 16 exceed $15,000!As a local tax, the levies are collected to support local government and education costs. Our problem is: As the governor proposes to cut municipal and school aid, local officials will be forced to rely even more on property-tax revenue. Homeowners, in turn, will have to dig deeper into their pockets. It is no wonder many senior citizens are forced to abandon their homes and many of our young persons flee the state to live elsewhere.
This is why the state created such property-tax relief programs as the homestead rebate, senior freeze, and veterans' and disabled property-tax deductions. Due to tough economic times, however, the governor has cut these programs out of his budget proposal. There will be no homeowner rebates in 2010, and in 2011, they will be slashed by 75 percent, all while the senior freeze program is frozen.
How does the governor know his proposed "tool kits" are going to help? Because the model program, "Proposition 2.5" from Massachusetts, significantly lowered property taxes on its citizens.
One slight problem: New Jersey's structure is vastly different from that of Massachusetts. First and foremost, when Proposition 2.5 was passed, Massachusetts increased state aid to its local governments by 95 percent . Needless to say, Gov. Christie's proposal does not offer similar boosts in local aid.
More important, the very foundation of raising revenue in New Jersey is different from that of Massachusetts. New Jersey ranks third highest among states in its reliance on property taxes, right behind New Hampshire and Vermont. We barely scratch the surface in other revenue sources, such as general or selective sales taxes, and are ranked in the bottom for licensing fees. For instance, in New Jersey, retailers pay $50 for a license to sell cigarettes. In New York, retailers pay $5,000 to the state.
We therefore need to restructure the entire way we fund local government services, not just put a cap on it. In this regard, I have proposed "Proposition NJ," modeled after California's "Proposition 13." PropNJ starts with the premise that property taxes across the state would be rolled back by 25 percent. In 1978, California similarly reduced property taxes across the board, but by 57 percent, and then limited the way municipalities could increase them. Proposition NJ, however, would allow municipalities' levies to float back up, and in the meantime, give the Legislature two years to find alternative means for funding local services. Moreover, PropNJ needs the approval of voters, who in turn would acknowledge that other funding sources will need to be adjusted to take the place of property taxes.
These sources of revenue can be based upon other models, such as Massachusetts' sales tax on clothing priced over $175, or North Carolina's sales tax on gasoline, cigarettes and liquor. Other states' claims to lower property taxes are based upon their higher levies on goods and services. For instance, while New Jersey has no sales taxes on food or clothing, Florida has a 6 percent tax on clothes, while North Carolina taxes non-prepared groceries at 2 percent.
We all know that if property taxes are reduced, other taxes will have to go up. At the same time, a "cap" on property tax increases alone will never address the underlying cause of our distress. PropNJ creates a new start by mandating a 25 percent cut and then giving the state time to find other sources of revenue. And by starting out with a reduction, this forces the Legislature to act, rather than creating another commission to study the problem. In the meantime, if the governor, or any other politician, says we can put a "cap" on those taxes, we can say: "Fuhgeddaboudit! We need a rollback."
Reed Gusciora, D-Princeton Borough, represents the 15th District in the New Jersey Assembly.
Is this FAIR ?????????????? Time for ALL working individuals to be responsible for their own care !!!!!!!!
What is needed is a complete constitutional change in the way schools are paid for. If the issue were simply municipal taxes, no one would raise an eyebrow. In Montgomery Township, a high income, high-value real estate, well performing school district, municipal taxes last year were only $1558 - big deal.
The county taxes were higher by a few hundred dollars. Schools are the killer.
But here's the problem: because taxes come in one big gag-inducing bill, people get upset when they see it in one place, and opportunistic sorts get themselves elected by claiming "NJ has the highest taxes in the country!" Not true: NJ taxes are #28 in the country for persons with average income, according to some economic studies.#28! If you want to see high property tax, move to Connecticut, where they have a property tax on your house, car, boat, airplane, whatever. My wife and I would pay $1200 more per year in Connecticut.
We have the second lowest gas tax in the country, which helps underwrite those humongous SUV's people wheel around in. No one in Trenton has the will to raise the gas tax. Why is that? It's a moneymaker, much of it underwritten by interstate travel on the Turnpike, people won't mind it of they know it pays off the debt, it makes sense. But the Legislature won't do it.
Other states have lower sales tax, but they charge it on everything: The result is you pay more over the year on sales tax at a lower rate, than we would in NJ. Is it rational, please, somebody tell me, that the sales tax on a Big Mac is bigger than the sales tax on a $2,000 men's suit? This doesn't make sense.
Suggestion: put the schools on a county system, pay for them with a combination of statewide taxes, excise, county and municipal taxes as they do in Pennsylvania. And stop rearranging the deck chairs!