Today is the day. The four joint legislative panels are expected to issue their recommendations on how the state should deal with its property tax problem and budget woes.
Today’s Star-Ledger offers a bit of a preview that features an interesting array of changes, but that may ultimately lead nowhere.
I don’t mean to be pessimistic, but consider what we are talking about here — changes in state and local government that the special interests in Trenton are sure to pan, a public craving tax relief but that is unlikely to agree to many of the changes and a group of legislators that has, in the past, shown the political will of a weather-vane.
Some thoughts:
1. Consolidation legislation
Here is how the Ledger describes what is likely to be on the table:
The first recommendation from the committee that studied consolidating towns and schools and sharing services will be to set up a commission of nine members with experience in business management, government policy or academic research, according to a draft of the panel’s report.
The proposed Local Unit Reorganization and Consolidation Commission would recommend which towns should be merged. Unless lawmakers voted down the idea, mergers would be put up for a public vote in the municipalities involved, and each town would have to approve the proposed merger.
An interesting idea, but one that does not go far enough. Having talked with the folks in Jamesburg and Monroe and having covered the two Princetons, it is clear to me that most communities are going to opt not to consolidate. It doesn’t matter that Jamesburg residents would benefit through a broader tax base and more opportunities (a larger police force, a recreation department, etc.) or that the Princetons in many ways have merged much of their operations (joint planning and health boards, joint recreation department).
The elected officials and bureaucrats in the towns likely to be on the consolidation short list will fight it.
A better solution would have been the original proposal in which the state Legislature and governor would vote on a consolidation report issued by the panel, similar to the base-closing process used by Congress. Then let the towns have a veto vote with the veto only taking affect if a supermajority of each town opposes the proposed merger.
2. School aid changes and the budget vote
The school funding committee is “set to unveil more than two dozen proposals, including a plan to boost school aid by up to $1 billion a year and distribute the aid more widely,” the Ledger said, with much of the extra money expected to go to “towns with large concentrations of senior citizens.”
The new formula will estimate a community’s relative wealth — and, therefore, the level of state aid it needs — on a per-person basis rather than on a communitywide basis. The change should result in more funding for towns where seniors predominate, (said Assemblyman Herb Conaway, D-Burlington, the committee’s co-chair).
The committee also will propose a new school spending cap in which “School tax increases would be limited to the annual inflation rate, with a special adjustment to account for enrollment growth.”
Communities that stay within the limits would no longer have to put their budget up for a vote. But if a school board wanted to spend more than the caps allowed, it would have to seek voter approval in an April election with special hurdles: The vote would be valid only if 20 percent or more of the district’s registered voters participated, and the extra spending would have to be approved by 60 percent of those voting.
It is an interesting proposal, with much to recommend it, not the least of which is an end to the sham April budget vote. But the hurdles being proposed seem unnecessarily onerous — why the supermajority if there is going to be a minimum turnout requirement for districts that seek extra spending from the voters? The other option would be to abandon the minimum turnout and require a supermajority.
3. Tax rebates
Lawmakers plan to wait until tomorrow to lay out specifics of their plan to reduce property taxes for most taxpayers by up to 20 percent.
That plan would replace existing property tax rebates with a credit of up to 20 percent of property tax bills. At least half the state’s homeowners would be eligible for the full credit, but those with higher incomes would see smaller credits, and top earners would receive none.
This seems more a case of political pandering than actual reform. The rebate program has been a political pawn in New Jersey for too many years and while it does help offset high property tax payments, it doesn’t address the issue of fairness adequately and it creates a new expenditure in a state budget that has been a royal mess.
A better solution? An expanded state income tax. Here is the conclusion from a recent report from New Jersey Policy Perpsective:
Over the past 30 years, New Jersey’s income tax has earned its keep and more. It has produced billions of dollars in revenue and has made the overall state and local tax system at least somewhat less oppressive for middle- and low-income people. The fact that local property taxes continue to threaten the economic well-being of all but the wealthiest in New Jersey is less an indictment of the income tax as it is a reminder of how much worse things would have been if politically courageous lawmakers had not adopted the tax in 1976.
But that is not enough. The time has come for New Jersey to better balance its tax system by relying more on the one tax that is based on ability to pay. Progressivity is a virtue, not a vice.
Year after year, New Jersey is at or near the top of the nation in median household income, yet even as income grows more concentrated in the hands of a relative few households, the state clings to its property tax tradition. New Jersey’s tax system should reflect reality, not flout it.
South Brunswick Post, The Cranbury Press
The Blog of South Brunswick
Hank Kalet 