EDITORIAL

A new Rx needed for tax reform.

   When Gov. Jon Corzine called the state Legislature into special joint session last summer to address the state’s property-tax and budget crises, he insisted that a 4 percent cap be placed on tax bills.
   The cap, he said in July, needed to be on "the increase in the property-tax bill itself" so that it "would cut the recent spiraling rate of increases by more than a third."
   The theory was simple. Constrain a municipality or school board’s ability to ask taxpayers for money and it will be forced to constrain its spending.
   The promised impact of the tax-bill cap, however, always seemed a pipe dream to us, likely to do little more than tie the hands of local governments and school boards without offering much in the way of relief.
   And that was before the state Legislature applied the cap to the tax levy — or total amount to be raised by taxes — and not to individual tax bills.
   It also was before the state’s tax-reform effort bogged down, resulting in a watered down stew of legislation that nibbles around the edges but fails to address the real issues facing the state.
   The levy cap was supposed to be one of a long list of reforms that were to include appointment of a state comptroller with the power to audit state and local government entities; creation of a commission that could order municipal and school consolidation and shared services; creation of new local revenues; revision of the state’s school funding formula; and the modernization of the state’s tax structure.
   Weakened variations of some of the reforms have been signed into law, while others — a new school funding formula, for instance — are being tabled until next year.
   So, we’re not surprised to hear local mayors and school administrators criticize the arbitrary nature of the cap and to complain that they are being made the scapegoats for a problem for which they bear only a small portion of the blame.
   Consider the predicament facing the South Brunswick school district:
   • It is looking at contractual salary increases ranging from 4.15 percent to 4.95 percent for its eight bargaining units — and this does not take into account the three new teaching positions being created to address a 2.5 percent enrollment increase.
   • Health benefit costs are estimated to rise by as much as 15 percent.
   • And pension costs for non-teachers are increasing 36 percent.
   This means cuts in other areas — including the elimination of six non-teaching positions by attrition, along with a goal-setting program for kindergartners and an academic intervention program.
   And the district already is looking ahead to next year, when it may have to eliminate more non-teaching staff, and further into the future when non-mandatory busing and full-day kindergarten could face cuts.
   Municipal governments face some of the same constraints, though many do have other revenue on which they can rely to maintain programs.
   In the end, the cap law is a flawed solution to the wrong problem. It attempts to fix the symptoms (rising property taxes), without addressing the root causes of our illness (among them single-source funding, not enough state financing, too many school districts and municipalities).
   A different prescription is needed.