Christie offers compromise on 2.5 percent property tax and government spending cap proposal

Thursday, 01 July 2010 15:20
christieTL070110_optBY TOM HESTER SR.

Gov. Chris Christie told a join session of the Legislature Thursday that he will accept a compromise version of his proposed 2.5 percent cap on annual property tax hikes and local government and school spending increases.

Christie said he will accept a 2.5 percent cap that would not require voter approval of a constitutional amendment on the November ballot if it covers future pay hikes for government employees, does not cover paying debt costs, and allows voters to decide when the cap on their local government's spending and property tax hikes can be overridden.

The governor said he will not sign legislation sent to him Monday by the Democratic-controlled Legislature that calls for a 2.9 percent cap.

"The people have been let down by politician of both parties for 30 years,'' Christie said in his 13-minute address. "It is time to make the people part of controlling and determining their own taxes. Anything less would be unacceptable to me. This is less than a constitutional cap that I support by more than we have now.''


Presently, there is a 4 percent cap on government spending and property tax hikes.

"This will improve our state,'' Christie said of his compromise proposal. "This will control local government spending and also bring our citizens some of the relief they so desperately need. There you have it, a choice of a constitutional cap I proposed and prefer or a statutory cap that you proposed but one that is a hard cap at 2.5 percent but allows to play a role. I can prefer either.''

Christie ordered a rare special session of the Legislature to begin Thursday to consider proposed legislation designed to control government spending.

He ordered the Legislature to reconvene at 10 a.m. on Saturday to continue the special session.

The governor, who has exchanged heavy criticism with Democrats in the past three months, entered the Assembly chamber to a full minute of applause from all legislators and a balcony packed with his supporters. He thanked Democratic leaders for passing a compromise $29.4 billion 2010-11 state budget on Monday.

"We have built a bridge I hope to walk over this week to end nightmare of high property taxes,'' Christie said. "We must now immediately set out in a new direction. The job is not complete. As much as state government has grown in past years, local government spending has grown even more. In the past decade, local government spending has grown 69 percent while property taxes have grown 70 percent.''

The governor added, "It is time to let New Jersey property taxpayers be keepers of their own fate. Let's help property taxpayers take back their own state.''

Following the address, Assembly Speaker Sheila Y. Oliver (D-Essex) said she has directed the Assembly Budget Committee to meet Friday to consider the compromise cap proposal. But Oliver also said she intends to go on with her plan to have lower house committees meet through the summer to review over 30 bills designed to reduce government spending.

"...This will be an extensive effort over the summer to properly analyze reforms put forth by Democrats and Republicans and develop a real plan of action to bring relief to taxpayers,'' she said. "This is going to be a thorough review that brings smart reform to New Jersey. It will be an in-depth review of bipartisan ideas, with the goal being to study, organize and approve an effective plan to control spending and property taxes without crippling crucial services and crushing worker rights. We've seen the pitfalls of rushing policy, so we will do this the right way.

"And I realize the governor does not support our 2.9 percent plan. That's why I will announce right now that I expect the Assembly Budget Committee to meet tomorrow to continue considering cap plans. This is a compromise approach. We are willing to work with the governor,'' Oliver said. She concluded, "Well, we are waiting in the center of the room. We are part of the solution. We will soon find out whether the governor shares that willingness."

Senate President Stephen M. Sweeney (D-Gloucester) said the Senate Budget and Appropriation Committee will also meet Friday morning in the Annex.

"The ... committee will meet in early tomorrow to lay out a timeine for action on the governor's proposed property tax cap and ‘tool kit,'' he said. "While New Jersey needs property tax relief, we will do it right and in partnership with the governor. It will not be a rush job to satisfy a sound byte.”

Assembly Republican Leader Alex DeCroce (R-Morris) and Conference Leader Jon Bramnick (R-Union) said they hope Democrats would support Christie's constitutional 2.5 percent cap or his compromise proposal.

"The Assembly Republicans would prefer a constitutional amendment capping spending at 2.5 percent, but we are willing to work with the governor and Democrats on the 2.5 statutory compromise he outlined in his address this afternoon," DeCroce said. "The governor has offered an opportunity for compromise, but it is essential the core principles contained in the concurrent resolutions (ACR 130 and 131) remain intact. We are resolved to fixing a problem that has plagued taxpayers for decades and are committed to providing sustained and real relief. We hope the majority party will join us in that effort."

"The governor made a fair and reasonable offer to the other side of the aisle," Bramnick said. "The bottom line is this Legislature must be willing to do whatever is necessary to make sure we provide real and permanent property tax reform for taxpayers. If that means staying here all summer, so be it. Property taxes are the most pressing issue facing our citizens and we need to resolve this problem now."

Both Marie S. Bilik, director of the New Jersey School Boards Association, and William G. Dressel, director of the New Jersey State League of Municipalities, said they want Christie and lawmakers to approve additional legislation designed to contain spending besides a cap.

"There is far too much at stake for the next week to turn into a political standoff," Bilik said. "We are confident that state leaders will begin progress toward needed reforms that will control property taxes while ensuring adequate services. This discussion cannot be limited to the cap issue, but must encompass the entire toolkit proposed by Governor Christie.''

Bilik said the School Boards Association supports ‘reasonable caps'' on school tax levies. However, she said a reasonable cap would take into account expenditures that are clearly outside a local school district's control.

"In particular, ‘extraordinary' special education services represent the type of cost increase that is forced on school districts and is totally outside their control," she said. "A school district has no choice but to provide these services, which sometimes exceed $100,000 per student if a residential facility is involved. When a child who receives such services relocates to a community, it could have a significant impact on the school district's finances."

Bilik said that a cap should also recognize the cost increases that school districts encounter as a result of spikes in enrollment and health insurance premium increases, as well as start-up costs for a new school building, such as staffing and classroom/curricular materials.

"Local school boards can operate within a reasonable cap that is part of broader changes empowering them to control costs through negotiations and personnel administration," she said. "The special session should be the start of serious consideration of the Christie Administration's toolkit that would give local school boards more authority to control costs through collective bargaining and personnel policies."

Dressel added, "On Tuesday, the governor correctly noted that a cap without the toolkit is ‘unworkable.' All we ask is for the tools to make a cap, whatever the percentage may be, workable. The League of Municipalities can support a property tax levy cap, if and only if it is moved as the final piece, not the centerpiece, of vital property tax relief initiatives.

Such initiatives include binding arbitration reform, COAH reform, health benefits reform, mandates relief, civil service reform, flexibility to deal with pension costs, utility costs, disaster and emergency response costs and other costs imposed by factors beyond the control of local leaders, and conformity of any new local caps to a new State spending cap,'' Dressel said.

The Budget Committee hearing is set for 10 a.m. in the Statehouse Annex in Trenton.