Christie conditionally vetoes Democrats' 2.9% property tax cap as part of compromise to set a 2% cap

Tuesday, 06 July 2010 16:03

christieTL012810_optSenate Democrats agree to move but Assembly Democrats not part of settlement


As part of a compromise designed to bring about a 2 percent cap on annual property tax hikes and local government spending, Gov. Chris Christie Tuesday conditionally vetoed Democratic-sponsored legislation that would have set a 2.9 percent cap.

Christie returned Senate bill 29 to the Legislature with changes that will provide for a so-called hard cap of 2 percent with limited exceptions while giving local voters the ultimate decision-making authority on whether or not the cap should be exceeded.

The veto was part of a compromise reached Saturday after lengthy negotiations between Christie, his staff and Senate Democratic leaders. Senate President Stephen M. Sweeney (D-Gloucester) agreed to a 2 percent cap that would need to be approved only by the Democratic-controlled Legislature and not voters statewide on the November ballot.

After the conditional veto was announced, Senate Budget and Appropriations Committee Chairman Paul Sarlo (D-Bergen) said the full Senate will vote on the 2 percent cap proposal on Thursday. The Senate will not hold a public hearing on the compromise bill

Sarlo also said the Budget and Appropriations Committee has moved a hearing on 33 related bills from Thursday to July 19 so as not to conflict with the floor vote. The senator also Sarlo also said the postponement would give committee members time to decide how best to break-up the so-called municipal tool kit bills to ensure what he described as a fair and equal hearing on each proposal.

“As anxious as I am to get started, I don’t want this committee to launch into a schedule that is compressed only for the sake of being compressed,” Sarlo said.  “I don’t want to be competing with voting sessions for our time and attention. The governor and Senate president have asked us to complete our work by early fall. Even with this delay, I have no doubt we’ll meet that deadline.”

The Senate will not have another voting session until late August. Sarlo said he hopes to have some measures ready for votes at that time.

Assembly Speaker Sheila Y. Oliver (D-Essex) is not part of the compromise and is moving ahead with her plan to have the lower house's Budget Committee review all cap proposals beginning Wednesday. The hearing will begin a noon in the Statehouse Annex in Trenton.

According to the governor's office, the conditional veto adheres to three principles necessary to drive down property taxes – significantly lowering the property tax cap from 4 percent, eliminating exceptions to the cap and giving the public a voice in deciding when – or if – to allow the cap to be exceeded.

The conditional veto cuts the cap in half, from 4 to 2 percent, and reduces the number of exceptions or waivers from 14 to 4, including the elimination of a catch all waiver that allows for exceptions not covered in the first 13.

"Now is the time to act, not hesitate,'' Christie said. "The stakes are too high for New Jersey families who are struggling to make ends meet and fighting to stay in their own homes to delay any longer in providing real, meaningful property tax relief.

"In the last few days, we have accomplished much together, including a bipartisan vote in favor of a lean budget and an agreement to move forward in providing the property tax relief desperately needed by New Jersey families,'' the governor continued. "By continuing our work together, we will accomplish what was thought impossible by some – decisive action on a decades long problem that has become a full blown crisis for the people of our state.

"Furthermore, the conditional veto finally gets Trenton bureaucrats out of the business of raising people's property taxes by granting waivers to the cap,'' Christie said. "Instead, the people have the ultimate decision making authority in whether or not the cap should be overridden, not the politically appointed Local Finance Board. As the governor has stated, anything less would only continue down the same path that has failed New Jerseyans and failed to provide relief to the crisis facing families.''

In the conditional veto, Christie noted that since 2001, spending at the local level has spiked 69 percent – from $26.5 billion to approximately $44.7 billion this year. He said that had a hard, 2 percent cap been in place for the last decade, the average family's property tax bill today would be $5,167, or $2114 lower than the current $7,281.

Bill Dressel, New Jersey League of Municipalities director, said local government officials are concerned that if Christie and legislators reach an agreement on a 2 percent cap, they will be tempted to declare victory for tax reform and forget about additional government cost-cutting bills that local officials argue also need action.

“The governor has said, ‘New caps without the toolkit are unworkable.’’’ Dressel said. “He is right.

“But now, having reached agreement on unworkable new caps, policy makers will be tempted to declare victory in the ongoing struggle against oppressive, regressive property taxes, just as was done after the 2006 special session for property tax reform,’’ Dressel said. “As Yogi said, ‘It’s déjà vu all over again.’

“If the momentum for reform lags in Trenton after passing new caps, but before passing management reforms and mandates relief initiatives, local officials will be forced to operate an unworkable engine,’’ Dressel added. “The real losers will be the people of New Jersey who will be forced to choose between higher taxes or a steady and certain deterioration of vital local services. Vital services will be reduced or eliminated, or taxes will go up, unless cost containment measures are enacted in Trenton, before the governor signs the new caps into law.

“Absent cost containment initiatives or an end to the diversion of municipal revenue replacement funding, these new caps will only shift the burden of deciding whether to slash vital municipal services or increase property taxes from local elected officials to the citizens who elected them. No one can declare a victory for real property tax reform until the toolkit is enacted. ”