While special session may not solve issue, area officials agree something must be done
By: Stephanie Brown and Joseph Harvie
Local officials say something must be done about rising property taxes, but that a proposed special session of the state Legislature is not likely to fix the problem.
Municipal and school officials, as well as state representatives and others, say property taxes have been rising for years and that there is no end to the increases in the foreseeable future. A change in the way state, county and municipal government functions is necessary and a state constitutional convention would offer the best hope of reform, they say.
Gov. Jon Corzine and the leaders of both houses of the state Legislature are planning a special joint session of the Legislature for this summer to address the property tax issue. The plan is to have four committees, one each to discuss school funding, public employee benefits, government consolidation and more general constitutional issues. The committees are expected to begin meeting by the end of the summer. Once committee work is completed, the Senate and Assembly will meet jointly to review recommendations and consider legislation.
Bill Dressel, executive director of the state League of Municipalities, is not optimistic about the special session. He said the issue has been on the table in New Jersey for more than three decades, but that legislators refuse to make decisions to lessen the state’s dependence on property taxes to fund schools and municipal government because of the impact decisions could have on their re-election prospects.
"We firmly believe that property tax reform is the number one issue, not only now but its been at the top of our legislative agenda for the past 35 to 45 years," Mr. Dressel said. "Quite frankly, we are quite frustrated by previous administrations and legislators who have literally done nothing about tax reform."
A special session on property tax reform was called in the 1970s, he said, but nothing came of it. Mr. Dressel said the issue should be taken out of the hands of the politicians and instead given to the citizens at a constitutional convention.
"The constitutional convention is the priority for us," Mr. Dressel said. "If they want the special session then lets get the constitutional convention on the ballot in ’06. If they come up with a recommendation that can solve the problem then we don’t have to go to convention. Let the people decide by voting this November."
Monroe Mayor Richard Pucci said a constitutional convention would be more productive.
"A constitutional convention would probably be the best bet for tax reform because that might take it out of the political realm," said Mayor Pucci.
For a constitutional convention to occur, both houses of the state Legislature would have to pass resolutions by Aug. 24 supporting it.
Assemblyman Bill Baroni, a Republican whose district includes Monroe and Jamesburg, supports a constitutional convention.
"I trust the people of New Jersey," Mr. Baroni said. "It would be easier for people if they don’t have the specter of the next election, and in New Jersey it seems there is an election every year, to influence their decision. Delegates can’t run for re-election."
He said the last major constitutional convention in New Jersey occurred in 1946 and 1947, when the citizens chose New Jersey’s current governmental structure with a strong governor, a state assembly and a senate.
If a convention is called, he said, citizens from all communities are elected and meet to decide whether or not to change to state constitution. He said a convention could focus on a single issue, in this case the state’s tax structure. Once a proposal is completed, it is put before the voters as a ballot question during a November general election, Mr. Baroni said.
Assemblywoman Linda Greenstein, a Democrat whose district includes Monroe and Jamesburg, also believes a constitutional convention is necessary, but that it should be held in conjunction with a special session of the legislature.
"I believe the convention would work with a special session of the Legislature that would meet to frame the issues out with the knowledge they have," Ms. Greenstein said.
Ms. Greenstein said she thinks shared services and consolidation should be reviewed, along with school funding and the state pension system.
State Sen. Peter Inverso, a Republican whose district includes Monroe and Jamesburg, also believes a convention would be best. He said he is concerned about the politics of the proposed special session.
"The parameters of the special session are still being worked out now, and nothing is finalized, but here the Democrats intend not to provide for equal representation on the committees," Sen. Inverso said. "It is a bad start and it certainly can lead to the politicization of the process."
Jamesburg school board President Don Peterson is opposed to waiting for a constitutional convention. He said time is of the essence for the borough and a convention, because of the length of the process, would just push a solution into the future.
"That concerns me because we have a stagnant tax base, and every increase gets passed directly onto the taxpayer," Mr. Peterson said. "It’s important that they do something now, because they’ve been dragging their feet for a long time."
Local officials say the biggest issue is how to fund schools.
"In the big picture, the real enemy is that the property tax has been used to pay for things on a local level," Mayor Pucci said. "Do we want that for years to come, or do we want to find an alternative?"
Some officials support funding drawn from a progressive tax, such as income taxes.
"To me, the solution is and this is a very simplistic way of saying it that those with the most money need to step up and pay for the betterment of the community," said Adam Bushman, a Republican and former Jamesburg councilman.
Local officials say there are a number of options that the state can explore to reduce reliance on local property taxes if changes to the state’s income tax code are not made.
"Having thought about this a long time, the next best thing (to an income tax) would be to help those who need it most," Mayor Pucci said. "That would be the seniors."
He said seniors are living in their homes longer, and have paid their school system dues. Mayor Pucci suggested reducing or freezing the education portion of property taxes for seniors who have lived in their homes for a certain length of time.
Monroe Councilman Irwin Nalitt, who lives in one of the Monroe retirement communities, said property taxes are regressive and punish seniors, who are on fixed incomes.
"Their purchasing power is decreasing and yet they’re taxed at the same rate as people making three times the amount of money," he said.
Mayor Pucci said developers should contribute to the costs created by new development. He suggested that the state allow towns to collect a new construction/developer fee based on the value of the project being built. That money would then be put into a fund that could be used toward school construction and other projects. The fee would be similar to the affordable housing trust fund in place in many communities.
"That would help all taxpayers," he said.
Mr. Bushman suggested increased taxes on commerce that takes place across state lines.
"The sale should be taxed as if it took place in New Jersey," he said. "That way, it places the tax burden on people outside of New Jersey."
Mr. Bushman said New Jersey needs to ensure that money from the sale is recouped.
Consolidation of services was also at the top of the list for tax reform.
"We should look at ways to cut government waste," Mr. Baroni said. "The government needs to make sure it is wringing every penny out of every tax dollar."
Jamesburg Mayor Tony LaMantia and Monroe Republican Organization Chairwoman Sidna Mitchell both recommended regionalized school districts.
Ms. Mitchell, who is a former official with the state Council on Affordable Housing, said there are 566 municipalities in the state, and 612 school systems. She said she would like to see a smaller number of school districts.
"If New Jersey had a county school system, all the towns in county would be more equal," Ms. Mitchell said.
A county school system would especially benefit the borough, because it would spread out the county’s wealth, giving built-out Jamesburg access to a larger tax pool, Mayor LaMantia said.
In the end, Mr. Baroni says, something must be done to stem the rise of property taxes, which he says is driving New Jersey residents to neighboring states such as Delaware and Pennsylvania, where property taxes are lower.
"If the government can’t figure out a way to keep its constituents in their homes, then what we are doing in Trenton is not the most we can do," Mr. Baroni said.