Tag: State

Toll sale would take its toll

The debate on selling off the state’s toll roads has begun.

The Assembly Transportation Committee began hearings today to discuss the misbegotten proposal — with many of the members rightly pointing out how it is less likely to fix our debt problems than exacerbate them.

Assemblyman John Wisniewski, D-Middlesex, the committee chairman, warned that any “monetization” plan would be similar to past borrowing schemes that have led to the state’s crushing debts. Selling or leasing state assets is now being promoted as a way to ease those burdens.

Wisniewski said a long-term privatization plan would still leave the public on the hook for billions of dollars of debt through higher tolls.

And this does not take into account the potential maintenance issues associated with a privatization plan.

As I’ve said before, end this debate now before we talk ourself into doing something dopey.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

Email me at grassroots at comcast dot net.

Tax reform, what tax reform?

I offer this commentary from New Jersey Policy Perspective, which arrived via e-mail today, in its entirety and unedited because it is worth reading. I really have little to add.

Whatever it was, it wasn’t tax reform

Maybe the best way to look at the “tax relief” package recently adopted by the Legislature is as the last act of the 2005 campaign, rather than the solution for New Jersey’s over-reliance on local property taxes to pay for government services and educating children.

Such a context makes it a bit easier to understand, and to accept on its own terms while recognizing that this is far from the reform New Jersey needs.

Candidate Jon Corzine ran for Governor with a promise to reduce property taxes, in response to his opponent’s having put forward a plan. In his first year in office, Governor Corzine made it clear that more had to be done to get the state’s finances in order before he could deliver on property taxes. In year two, he and the Legislature will be able to tell most New Jersey households that 20 percent will be knocked off their property taxes. Basing the amount of relief on income makes sense, and for most people we’re talking about a rather meaningful amount of money, at least for as long as the funding source holds up.

But now it’s time to get serious.

The special legislative session that produced 98 recommendations and laid the groundwork for the 20 percent reduction covered a lot of ground. There were flashes of vision and courage when it came to confronting the problems New Jersey inherently perpetuates by dividing itself into so many municipalities and school districts-an 18th century system ill-suited to today’s needs. Unfortunately, some of the boldest proposals (like a pilot program creating a countywide school district) wound up on the cutting room floor in the scramble to find enough votes for the tax relief.

What never seemed to make it into the mix-and needs to be there-is a long overdue, comprehensive look at New Jersey’s tax system. Only when that takes place will we find the way out of highest-in-the-nation property taxes. Often due to political concerns based on perception, not reality, and enflamed by misunderstandings and misrepresentations, key elements necessary for solving New Jersey’s tax mess are not being considered. The state income tax is a good example.

Much has been said about the top rate of New Jersey’s income tax being among the highest in the nation. But rarely is it pointed out that less than one percent of households make enough money to have to pay that rate. In fact, most in New Jersey don’t even pay the rate just below the top rate. Sort all of this out and you find that most New Jerseyans pay lower income tax than if they lived in New York State and much, much lower than if they lived in New York City. Most in New Jersey also pay less than if they lived in Pennsylvania.

The point here isn’t that any taxes in New Jersey are too low. It is, rather, to show there is much to be gained by considering the entire New Jersey tax system and looking for ways to put it in better balance. The income tax is much more closely tied than the property tax to one’s ability to pay. Your income goes down, so does your income tax, but that’s not true with property taxes. The value of your house can rise while income stays the same or falls, and you get a bigger tax bill though you are in no way better able to pay it.

During the debate in Trenton, some folks contended that it makes no sense to lower one tax by raising another. What actually makes no sense is that statement. Raising a fair tax to lower an unfair tax is a very good idea. If Trenton did nothing else that would be progress.

When we get beyond slogans and sound bites, New Jersey is left with this reality: we collect more from local property taxes than from the state sales and income taxes combined. It’s also true that the lower your income is in New Jersey the higher percentage of it you pay in the form of sales, income and property taxes combined. Real reform of the tax system would put all of this on the table. And it would also accept the fact that as bad as New Jersey’s tax system is (and it is) it is really a symptom of the larger problem: 566 municipalities and 613 school districts-an archaic, unsustainable structure more reminiscent of the Ottoman Empire than a 21st century state.

Real reform means looking not just at how much New Jersey spends, but where we spend it and who we call on to pay it. An honest assessment of tax burdens that squarely confronts who pays how much, and in which taxes, would point the way out of the morass. It would recognize the value of raising and spending more of our resources at the state and even county level and less locally. It’s the sort of thing that a tax convention made up of citizens would have no trouble contemplating but which elected politicians keep avoiding.

Whether you want to spend half as much as the state spends now, or twice as much, New Jersey needs a fair, adequate way to raise the money. We don’t have it now and we aren’t much closer to it than we were a month ago.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

Email me at grassroots at comcast dot net.

Finding his inner-Spitzer

A good column from Tom Moran in The Star-Ledger comparing the disappointing Corzine administration with that of New York new Democratic governor, Eliot Spitzer.

Spitzer (right) has been a bulldog; Corzine (left) a lapdog.

He has time to find his inner-Spitzer, but he needs to do it quickly before the bullies that run New Jersey government roll him completely.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

Email me at grassroots at comcast dot net.

Let’s call the whole thing off

I am of two minds on the state Senate’s failure to pass the 20 percent tax credit.

A graduated tax credit that could save the average taxpayer about $1,200 over the course of the year seemed to be better than nothing, but approving the credit might just doom further efforts to achieve real reform.

The reality is that the tax-credit plan was a sham, nothing more than a way to salvage the complete failure of the state’s tax reform efforts, to make it appear as if the state Legislature accomplished something even as all of the evidence proved the contrary.

The plan — a 20 percent property tax credit for those who earn up to $100,000, 15 percent for those who earn between $100,000 and $150,000 and 10 percent for those who earn between $150,000 and $250,000 — would replace the current property tax rebate propbram for most residents.

The plan also includes a questionable cap on property tax levies that, even with the massive loopholes attached to the bill, will do little to control taxes while tying the hands of local goverment and school boards — the entities we rely on most on a day-to-day basis.

Under the plan, the state would give money to the municipality, which would then apply the credits to individual tax bills reducing the required payments. Tenants and seniors would continue to receive rebate checks.

The plan sounds good on the surface, but has several serious shortcomings: 1) It may not be sustainable beyond 2008; 2) it does not address the way we raise revenue to pay for government; 3) or offer require any government streamlining.

This is the point that state Sens. John Adler and Nia Gill — two of the four Democrats objecting to the bill — were trying to make:

Sens. John Adler, D-Camden, and Nia Gill, D-Essex, questioned how the state would pay for the $2 billion credit program in the long run. A financial quirk gives the state government extra money to use for this year only. Adler and Gill both said the credit program, which will take the bite out of tax bills but not address root causes of high property taxes, falls short of true reform.

“If we were selling this tax package as a product, we would be in violation of the Consumer Fraud Act,” Gill said. She later added, “In plain language: We do not have the money to pay for this.”

Adler said the caps had been “gutted” and called for lawmakers to go back to the property tax reform drawing board, rather than pass watered-down bills and declare them “good enough.”

“We should step back, take a breath, ask for a do-over,” Adler said.

Taking a step back makes sense, as does the suggestion that Assemblyman Bill Baroni and state Sen. Peter Inverso — Republicans who represent Cranbury, Jamesburg, South Brunswick and Monroe in the Legislature — made to us last week:

Mr. Baroni said the state had its chance to reform taxes, and failed. He said that he would like to see a constitutional convention where citizens are elected as delegates and propose changes in the way the state taxes its citizens. The changes would then go to voters in a statewide referendum.

“The Legislature has had its chance,” Mr. Baroni said. “Now let’s let the people of ‘New Jersey do it.”

Sen. Inverso agreed. He said the Legislature has failed to make significant property tax reform, and he will continue to push for a constitutional convention.

“You have seen what happened to these proposals that have come out of the Special Session Committees,” Sen. Inverso said. “They’ve been diluted and to quote my dear friend (state Sen.) Barbara Buono, they’ve been emasculated. It shows that this process is not one where taxpayers, who don’t have a special interest presence each and everyday, are the ones that will benefit from it.”

I’ve written about this before, but it bears repeating: The four-month review of state and local government, their budgets and tax structures was a bold undertaking, but given the swirl of interests in Trenton and their fear of change, it was doomed to failure.

In the nearly three months since the release of the joint committees’ findings and recommendations, we have learned that the state Legislature cannot be trusted to overhaul the system.

It is time to let taxpayers have a whack at it.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

Email me at grassroots at comcast dot net.