I wish somebody would explain some elements of this plan to reform property taxes in New Jersey, because there are parts of it I’m apparently too dumb to grasp.
For example, one of the proposals to reduce property tax is to do away with the homeowner rebates most of us get every year (at least those of us who own homes, aren’t senior citizens and have taxable incomes of less than $200,000 a year).
Each year, for the last several years, I’ve gotten a rebate check of between $200 and $300 from the state. Now, if this portion of the tax reform legislation percolating around Trenton passes, I’ll no longer get that rebate — but I’ll presumably pay that much less on my tax bill.
Which is all well and good, but how exactly does this save me money? The state either does away with rebates, or it doesn’t collect that money to start with, but it seems to me I’ll still be paying the same amount either way.
Am I missing something here?
Same thing with the state sales tax. The state recently increased its sales tax rate, and says it will use some of that money toward the goal of reducing my property tax by 20 percent. But if I have to pay more in sales tax to pay less in property tax, do I have any additional cash in my pocket at the end of the day?
I don’t see that I will, but again, maybe I’m missing something.
Either that, or this is just some kind of shell game to make us think we’re going to save more money than we really are. Cynic that I am, I’m kind of thinking shell game. It wouldn’t be the first time.
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Although some of the tax-saving ideas floating around confuse me, I do have to credit the fine thinkers who served on the Joint Legislative Committee on Public Employee Benefits Reform for making some sensible recommendations.
Right now, according to the committee’s report, New Jersey’s retirement systems have an $18 billion unfunded liability, which means that sooner or later, we — the taxpayers — are going to have to come up with the money. At the same time, the State Health Benefits Program spends about $3.6 billion a year on health-care benefits for state employees. Those expenditures are expected to double by 2010 unless something changes.
To address the problem, the committee basically proposed that state employees be treated more like employees in the public sector, and less like pampered corporate executives.
It put forth a 21-point proposal regarding pension benefits that is more in line with what those of us who aren’t lapping at the public trough have to live with. Among other things, it would have increased the retirement age to 62, reduced the benefit formula for new members, based workers’ retirement benefits on their top five years of earnings rather than the current top three years, and set up something like a 401(k)-style program for part-time workers instead of guaranteed pensions.
It also came up with a 14-point proposal regarding health benefits that, among other things, would require all public employees and retirees to pay some portion of their health-care premiums and would encourage the use of generic drugs for prescriptions.
In other recommendations, the committee proposed capping the payment for accumulated sick leave upon retirement to $15,000, limiting accumulated vacation to one year and reviewing the number of state holidays for public employees.
Sounds pretty good, right? It does if you’re a taxpayer who doesn’t work for the state. And even though only 17 of the 98 proposals made by the four committees charged with crafting property tax reduction plans have been proposed as law so far, you have to agree it’s a fair start.
It goes without saying that most of us in the private sector don’t ever get paid for accumulated sick leave, and we are limited in the amount of vacation we can carry over year to year, so we never accumulate that much to start with. We don’t get nearly as many paid holidays as the state folk do. And in addition, most of us also pay a healthy portion of our health insurance premiums, gladly hand over our co-payments, and don’t gripe if they give us generic blood pressure medicine instead of the expensive name brands. We know that things could be a lot worse, and are thankful for the coverage we have (at least those of us who have coverage).
But to judge from the wailing and gnashing of teeth from the leaders of unions representing state workers and the thousands of workers who’ve been protesting the proposals in Trenton, you’d think we kicked them out of their warm houses during the holiday season with only a plastic tarp, a book of matches and a hunk of coal.
“It’s a disaster for state workers,” Sue Wright, government employee and protester, told The Star-Ledger last week. “We don’t deserve it. We’re not the cause of the problem.”
She’s partly right. State workers aren’t the cause of the problem. We are, for letting things get this bad. And they don’t deserve it, at least if Wright is talking about public workers’ gold-plated benefits package. What they deserve is something more in line with what those of us in the dreaded private sector, who pay their salaries, are getting.
On Monday, Dec. 11, unions representing state workers had promised to bring 30,000 people to Trenton to protest the benefits cuts. That’s a lot of wailing (they were taking vacation time, right?) And when the school folks show up to protest the recommendations set forth by the Committee on Public School Funding Reform, and the local politicians show up to protest the proposals made by the Committee on Government Consolidation and Shared Services, it will get even louder.
I just hope Gov. Jon Corzine and our state lawmakers have the courage to stand up to all of them — and the will to see these proposals through to law.
That may be a vain hope, and we’ll likely be disappointed. But in the words of that great American Wilford Brimley, “It’s the right thing to do.”
Gregory Bean is executive editor of Greater Media Newspapers. You can reach him at [email protected]