By: Cara Latham
State lawmakers released recommendations from the state Joint Legislative Committees last week aimed at reducing property taxes, some of which include possible municipal service consolidation and school spending reforms.
In addition, lawmakers discussed a proposal that would give homeowners an average of 20 percent property tax reduction through tax credits paid for by the state.
In the wake of the recommendations, local officials questioned whether those recommendations amounted to a fleeting tax-cut for the 2007 legislative election year, and called for more permanent solutions, especially cutting state spending.
The recommendations include creating "a permanent local unit reorganization and consolidation commission to facilitate municipal mergers and shared services," according to summary on the Legislature’s Web site.
The summary also included the possibility of a new school funding formula.
"A new school aid formula should be developed based upon the nationally recognized professional judgment panels (PJP) model for determining the resources necessary to meet educational standards," the summary states. In addition, the committees recommended that a school district’s share of state aid should be based on up-to-date measures of its ability to pay, including factors like property wealth and income per capita.
Bordentown Regional School District Superintendent John Polomano said school officials in the district do not yet know how any of the recommendations would affect Bordentown schools.
"The devil’s in the details," he said. "Anybody can make a hundred recommendations … but until the details become available" and the state comes up with an actual formula, they will have no way of knowing what will happen, he said.
Mr. Polomano added, "There’s a court directive to fund Abbott school districts, so they’re going to have to address that." The 31 Abbott districts named for the plaintiff in a series of state Supreme Court decisions designed to narrow the achievement gap between students in rich and poor school districts receive more than half of all the money given to New Jersey’s 616 school districts.
For the past five years, there has been a freeze in state funding to the Bordentown Regional School District, and every year when the school budget increases, the district is seeing the same aid that it received five years ago, effectively reducing overall aid as the student population grows, Mr. Polomano said.
And if the state were to look at either regionalizing schools as part of the consolidation efforts, "that’s something that’s going to be a battle, too" because even though it will save some money, there will be other expenses, like the cost of transportation for the students, Mr. Polomano said.
Since legislators are looking more to consolidate "doughnut hole" municipalities, Assemblyman Ron Dancer, R-30th, said the voters in those affected municipalities would have to approve the consolidation, he said. However, "taxes impact and affect everyone," he said. He also raised questions about the sustainability of the recommendations.
Bordentown Township Mayor Mark Roselli said Bordentown Township and Bordentown City already have shared services, as the school district is regional and the two municipalities have a regional sewage authority, both of which have been established for many years and worked well.
Mayor Roselli said the two municipalities are looking to share other services as well, including possibly sharing a municipal court.
He also said that the state "should make it mandatory that you should have shared services, and if you do have shared services, you get the tax benefit."
There’s no need for a commission to determine which services should be shared, nor should there be a referendum, giving the decision to the public, he said.
He called it "crazy" for legislators to hand the decision to voters because representatives have been elected to make the laws and make those sort of decisions.
"To me, as elected official, you’re not doing your job if you’re not making a tough decision," he said. "They’re afraid to make a tough decision because they’re going to anger some people. Everyone is not going to agree, but I think everyone agrees that you need to cut taxes."
Services that should be shared include police, fire and ambulance operations, he said.
"When you have a situation like ours, where many people don’t know where the boundary lines of the township exist, it just makes sense to share those types of services," Mayor Roselli said.
But ultimately, the state will have to cut its spending, he said. One option, for example, could be to eliminate county government or transfer the responsibility of fire, police and ambulance services to the county in a regionalized manner, he said.
"If you can’t do away with county government, why not have them undertake some of these services?" he asked. "It’s done in other states, primarily down South."
Bordentown City Mayor John Collom said that he’s seen the recommendations and thinks that "some of them are really kind of high in the sky, but others may have some bearing on (the property tax) problem."
"If you sum it all up, in my mind, it seems to me they have been addressing only ways to reduce the property tax, but I don’t understand how they’re going to pay for this," he said. "We already have a huge deficit in the state."
Mayor Collom said he wondered which programs or services would be cut to bring the state budget into balance, and that he hadn’t seen enough details that show where the state is getting money to pay for everything, yet reduce taxes at the same time.
"The legislators simply will not look at the expenditures side of (the relief)," he said.
Mayor Collom also said he doesn’t see how consolidation would be all that effective.
"It looks glamorous and very cute on the surface, but more often than not, it doesn’t save anything," he said. "If the state government is touting this as a means of reducing people’s property tax, it seems to me what they’re really doing is trying to slide out of their responsibility at the state level and throwing it right back (onto) municipal laps."
Assemblyman Dancer said specifics on legislative initiatives that will provide a 20 percent tax reduction and credit to most homeowners on their July 2007 tax bills, has not yet been released, but that "it is anticipated" that lawmakers will be voting on that legislation on Dec. 11 and Dec. 14.
"It has been said that those with more wealth will receive a lesser percentage" in rebates, Assemblyman Dancer said. "We don’t know where that threshold of income lies at this point. We need to see the specifics."
The 20 percent reduction is being funded in part by the $600 million in sales tax revenue generated from the increase of sales tax from 6 cents on every dollar to 7 cents. Voters approved the dedicated sales tax in the Nov. 7 election, allowing it to go toward property tax relief, Assemblyman Dancer said.
However, to fund the $1.2 billion necessary for the 20 percent refund, the other $600 million will be taken from the 2007-2008 budget, Assemblyman Dancer said.
"For the first year of this property tax relief package, you have $1.2 billion, but you’re utilizing two fiscal years" with 50 percent coming from each year, he said.
While there is no question that property tax relief needs to come immediately, the question lies with the proposal’s sustainability, he said.
"It’s going to be critical to look at the specifics of the legislation to ensure that this is not an election-year quick fix, because all 120 legislators 80 members of the General Assembly and 40 members of the Senate are all up for election next year," Assemblyman Dancer said. "I will be very adamant and vocally advocating that while we need property tax relief now, and it must be immediate, it also must be sustainable."
Assemblyman Joe Malone (R-30th), said that lawmakers have now begun to say that only some people will get the 20 percent reduction, and that residents, especially in this area, are not going to be satisfied.
Mayor Roselli said that everyone should get a tax break.
"To me, it’s noble but the crazy thing is they want to income test it," he said. "Everyone should be entitled to have a decrease in taxes, regardless of your income. Everyone pays taxes."
People who have higher incomes and have larger homes still pay higher taxes, he said.
If they spend more, "why be discriminated against?" he said. "That type of thing just doesn’t work, and again, it’s people who are afraid to make right decisions."
Mayor Collom said the legislators are "already starting to borrow against their future income, which isn’t going to be there. I think it’s really slight of hand and smoke and mirrors. It just doesn’t sound to me like it’s a real solution to the problem."
Assemblyman Malone said he proposed on Monday that "we give a 20 percent reduction this year, and then have no property tax increases for the next three years."
Assemblyman Malone, who lives in Bordentown said his property taxes have gone from $8,400 in 2001 to almost $13,000 in 2006.
"I don’t think I’m unique," he said. "I just think that people who live in this part of the state in New Jersey have been absolutely devastated by property taxes, and they need reform and they need relief. They are screaming out for property tax relief, and they deserve it."
Assemblyman Malone said he voted yes on the recommendations with reservation, because "I don’t think that some of the recommendations are strong enough."
Some reports suggested that lawmakers are looking at other ideas such as adding tolls to state highways, including I-95, in order to fund the efforts, and privatizing lottery.
Assemblyman Dancer said that many "trial balloons" like those proposals don’t address state spending.
"We cannot afford, in the state of New Jersey, more taxes we need to look at spending," he said. "We need to have a smaller, leaner government, not more revenue tax enhancers."
As for the tolls, "that is a nonstarter as far as I’m concerned, putting tolls on roads that have, ever since they were constructed, been toll-free," he said.
Mayor Roselli said it’s easy for lawmakers to implement more tolls on highways because it’s an easy source for revenues, but that the state simply should stop spending and make it mandatory that municipalities share services.
"Towns know what they have to do, and they’re willing to do it," said Mayor Roselli. "The state’s in the way."
Mayor Collom had the same idea, emphasizing that the state "just can’t seem to discipline themselves to (not overspend). These schemes are not going to be sustainable."

