How long will tax relief last?
By: Hank Kalet
I wouldn’t exactly call it tax reform, but taxpayers will see some modest relief beginning with their fall tax bills.
The question remains whether the 20 percent tax credit approved by both houses of the state Legislature (as of our Thursday deadline, it still was awaiting the governor’s signature) can be sustained for more than one year or whether it will be enough to tamp down the growing anger over the state’s inability to address its property tax problem.
The problem, of course, has been widely documented. The average New Jersey homeowner pays about $6,000 in property taxes a figure that obscures the fact that many New Jersey residents are paying in excess of $10,000. The Tax Foundation, a Washington-based anti-tax group, puts the per capita figure at $2,099 (2004 figures), tops in the nation and $155 higher than the per capita figure in Connecticut.
Locally, based on the average local assessments, Cranbury taxpayers pay $8,460, Jamesburg $5,413 and Monroe $5,026 though average assessments rarely match reality and tax bills are likely to be much higher for many.
Residents interviewed this week at several locations throughout Jamesburg and Monroe said relief was needed, though they were skeptical that the folks in Trenton could be trusted to make real reform happen.
At this point, I’d have to agree. While the tax credit will offer some modest, if temporary relief, it’s really nothing more than a face-saving maneuver, designed to salvage the complete failure of the state’s tax reform efforts.
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 program 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 governments and school boards the entities on which we rely most for day-to-day services.
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) it does not require any government streamlining.
This is the point that state Sens. John Adler, of Camden, and Nia Gill, of Essex, two of the four Democrats who voted against the bill made on Monday. The pair, according to the Asbury Park Press, "questioned how the state would pay for the $2 billion credit program in the long run" and criticized it for failing to "address the root causes of high property taxes."
"If we were selling this tax package as a product, we would be in violation of the Consumer Fraud Act," Sen. Gill said, according to the Press. She added, "In plain language: We do not have the money to pay for this."
Sen. Adler was just as critical, according to the Press, saying the reforms in particular, the property tax caps had been "gutted" and that it was time to "step back, take a breath, ask for a do-over."
Taking a step back makes sense, as does the suggestion that Assemblyman Bill Baroni and state Sen. Peter Inverso Republicans who represent Cranbury, Jamesburg and Monroe in the Legislature made to reporter Joseph Harvie last week: i.e., that citizens should get a crack at it.
"The Legislature has had its chance," Mr. Baroni said. "Now let’s let the people of New Jersey do it."
That means calling a constitutional convention in which 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.
"You have seen what happened to these proposals that have come out of the Special Session Committees," Sen. Inverso said last week (he voted no on the tax credits on Monday). "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 every day, 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 that controls the state capital, 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.
Hank Kalet is managing editor of the South Brunswick Post and The Cranbury Press. He can be reached via e-mail, or through his web log, Channel Surfing.

