A former Republican state senator spoke about property taxes at a meeting of township Democrats.
By: Scott Morgan
EAST WINDSOR Lower property taxes. It is at once a concept and a demand. But the answer to how to soften the property tax hit while not creating bigger trouble is not easy to come by.
Unless you happen to be former state Sen. Bill Schluter.
On Wednesday, former Sen. Schluter, R-Hunterdon, Mercer, presented the virtues of a convention for property tax (not to be confused, as it often is, with a constitutional convention) to a packed house at the Township Municipal Building. The night was sponsored by the East Windsor Township Democrats.
In her introduction for the former senator, Mayor Janice Mironov referred to the need for property tax reform as "one of the most important and pressing issues in the state of New Jersey today." Mayor Mironov added the drive toward a convention, which would seek to lower municipal and school district reliance on property taxes, "has been gaining momentum in the last couple years."
Taking the floor, Mr. Schluter outlined why he feels a property tax convention is long overdue.
"New Jersey property taxes are the highest of any state," proportional to income, Mr. Schluter said. On average, he said, New Jerseyans spend 46 percent of their income on property taxes, totaling nearly $15 billion a year. And, he said, that number keeps rising at a rate that outstrips the cost of living a full 7 percent per year.
He added that the burden of property taxes is three times greater on the lowest 20 percent of the economic spectrum (which often spends more than half of its income on property expenses) than it is on the highest 20 percent (which often pay only 10 percent of their income for the same purposes).
According to a 2000 report by New Jersey Policy Perspective, the national average American citizens pay toward property taxes is around 33 percent. The New Jersey average in 2000, according to the report, was 42.5 percent the highest rate per capita and second highest (to California) in percentage of personal income.
Though the primary impact of property taxes relates to school district and municipal funding, Mr. Schluter said the secondary effects of property taxes create four major additional problems.
First, he said, they encourage a vicious cycle of commercial development to offset taxes which merely serves to raise taxes through greater residential development. Second, escalating property taxes chase away senior citizens who can no longer afford to stay in their homes. Third, property taxes succor urban decay by raising the burden on families unable to maintain their homes. Fourth, despite that property taxes are used largely for education system financing, the disparity between very rich communities and very poor communities creates a dangerous imbalance in funding and, therefore, educational opportunities.
So why, Mr. Schluter asked, is a property tax convention necessary? Why not let Trenton fix the trouble? The answer, he said, is simple: State legislators do not want to deal with the issue because it’s controversial. Legislators, he said, know that to lighten property taxes, they would have to get the money from somewhere else in other words, raise other types of taxes. And state legislators, he said, vividly remember that such a move sealed the political fate of former Gov. Jim Florio, whose plan to even out state finances created massive political backlash against the Democrats in the early 1990s.
With legislators fearful of a short shelf life and policy makers eager to shift the burden of solving local tax problems to local government, little to nothing gets done, he said. He cited a quote by former Gov. Brendan Byrne, which states, "The history of the Legislature, when given a choice about taxes, has been to do nothing."
"That’s the trouble with Trenton," Mr. Schluter said.
But, he said, the responsibility to fix the property tax issue is indeed a state one. And although it is has been a largely untraveled road, there have been attempts. They’ve just not been successful, he said. He alluded to the 1985 SLERP (State and Local Expenditure and Revenue Planning) Commission that attempted to address property taxes, but the group’s efforts stalled before even getting off the ground.
Mr. Schluter said a property tax convention would be generated by popular vote and its agenda defined by that vote before the convention began. He said this to assuage concern among some that a convention would become a "runaway convention" at which delegates could rewrite the state Constitution. Although the Constitution would be rewritten, he said, it would only be changed so far as its outlined goals would be concerned.
He acknowledged that there is much dread being stirred by opponents to the convention. He even outlined some of the popular fear tactics spread by those opponents, such as the notion that the balance of delegates would not be representative of the state’s diversity and that cutting property taxes is merely prelude to raising income taxes to fill the void.
Mr. Schluter said the convention would, by design, be peopled by a broad range of delegates from each legislative district. These delegates, he said, would draw from every party available, even appointing representatives (say a Democrat) to districts that have no member of that party in its ranks.
He also said there are a myriad sources of revenue available from which to draw money wealth tax, sales taxes, and so forth and that the notion of raising only income taxes is absurd. Besides, he said, such outlandish ideas would receive vehement public protest and, therefore, never go through.
He also said the convention would not be allowed if it would subvert the quality of education in local school districts.
To the public, Mr. Schluter imparted the need to lend support. Only by advocating the convention will it happen, he said. And right now, he said, with no end to property tax grief in sight, is a good time to voice that support.
"It’s a lot better than the next best thing, which is nothing," he said.
So far, the convention for property tax reform has received the endorsement of nine daily newspapers in the state.

