newjerseynewsroom.com

BY ALAN J. STEINBERG

NEWJERSEYNEWSROOM.COM

COMMENTARY

I have served in the administration of one governor of New Jersey and have closely observed all other governors from Brendan Byrne up to the present. In my view, Governor Chris Christie's address to the Legislature Thursday was an unprecedented political masterstroke.

The Governor implicitly stated his intention to conditionally veto the "soft" statutory property tax cap of 2.9 percent passed by the Democratic-controlled legislature. He proposed instead that the Legislature enact as a statute his 2.5 percent "hard" cap proposal. The Governor had previously proposed the "hard" cap as a constitutional amendment.

I label the Democratic proposal as a "soft" cap because it permits certain broad exceptions, including cost increases of health care, pension payments, and energy. By contrast, Christie's proposed "hard" cap will allow only one permanent exception, namely capital expenditures, including debt service. There would be one temporary exception for existing collectively bargained union contracts, which would disappear upon the expiration of the respective contract.

Under the Democrats' proposal, taxes in excess of the cap could be placed into the budget by the municipal governing body or school district board, as long as they qualified under an exception. By contrast, Governor Christie's 2.5 percent "hard" cap could only be lifted for the budget year in question by 60% of the voters of the respective municipality or school district.

In short, Christie's original cap proposal remains intact, except that it is now proposed as a statutory cap rather than a constitutional cap. This actually in the short run works to the Governor's benefit. He now only needs the votes of 41 Assembly members and 21 Senators to enact his proposal, rather than the 48 Assembly members and 24 Senators whose votes he would need to get a constitutional cap proposal on the ballot this November.

The Governor also stated his intention to keep the Legislature in session until a satisfactory cap proposal is enacted. Christie has now totally seized the property tax issue by making the cap and the "tool kit" the centerpiece of his agenda. By keeping the Legislature in special session, he has made urgent the enactment of his property tax proposals.

The Governor previously wanted a constitutionally mandated cap because this would prevent subsequent Legislatures and Governors from loosening it. As he stated in his speech, however, he did not want the perfect to become the enemy of the good.

By agreeing to a statutory, rather than a constitutional cap, Christie has deprived the Democrats of their only argument on the issue that might gain some public support: namely that a constitutional cap would be far more difficult to amend than a statutory cap if an emergency situation warranted a change. It is obvious, however, that if Christie gets his statutory 2.5 percent cap, he will veto any efforts of the Legislature to amend it while he is Governor.

Skyrocketing property taxes are a major factor making life unaffordable in the Garden State. Christie's cap proposal has three aspects that make it more likely to gain public support than the Democrats' proposal:

1) The Governor's proposed cap has fewer exceptions, and thus the electorate will view his proposal as more likely to result in a lower rate of property tax increase than the Democratic proposal.

2) Under the Governor's proposal, the voters, and not elected officials will make the ultimate decision regarding property tax increases in excess of the cap. Thus, Christie's proposal has the powerful populist appeal of citizen empowerment.

3) The Governor's proposed cap of 2.5 percent is lower than the Democrats' 2.9 percent limit. The electorate most certainly will always prefer the lowest possible cap percentage.

If the Democratic legislators fail to enact the Governor's proposal, he will be able to attribute the blame to the influence of the public employees unions, namely the New Jersey Education Association (NJEA) and the Communication Workers of America (CWA). In the current political climate, as we saw with the passage of the state budget, having these two unions as adversaries can actually be a political plus for Christie.

A Quinnipiac Poll of June 17, 2010 reported overwhelming support for Christie's 2.5 percent "hard" cap proposal by a margin of 67 to 25 percent. I expect that support will actually now increase.

The passage of a "hard" cap would be revolutionary. Christie has demonstrated thus far, however, a remarkable ability to use his office to marshal the will of the electorate. The Governor will win this fight.

Candidate Christie promised to turn Trenton upside-down. Governor Christie is actually doing it.

Alan J. Steinberg served as Regional Administrator of Region 2 EPA during the administration of former President George W. Bush. Region 2 EPA consists of the states of New York and New Jersey, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and seven federally recognized Indian nations. He currently serves as Public Servant in Residence at Monmouth University.

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