NJ Property Tax Cap on Target

It’s rare that you have the opportunity, as an opinion writer, to say something positive about elected officials.  This is one of those cases.  The job is far from over, but our leaders in the Statehouse are on the right track in New Jersey in passing legislation that would cap annual property tax increases at 2 percent.  This could have been another partisan stalemate in which Governor Chris Christie and the Democratic controlled legislature pointed fingers at each other, tried to play a lame game of one-upmanship and, in the end, tax payers would lose again.  But, led by Governor Christie, it looks like this effort is going to succeed and it couldn’t come at a better time. 

 

Yes, there is going to be pain.  There are going to be serious cuts to services on the municipal level.  Public employee unions are beside themselves trying to figure out what their next move is.  But, this is undoubtedly the right thing.  Property taxes in New Jersey are the highest in the nation.  They are ridiculous and out of control.  They are driving people out of their homes and out of the state at a time when the economy continues to sputter and the unemployed are struggling to reenter the workforce. 

 

How this happened is a case study in what’s possible when our elected officials decide to take the high road and do the people’s business.  At first, Governor Christie, who has banged a lot of heads around in his first six months in office, said he wanted a constitutional amendment for his proposed 2.5 percent property tax cap.  He wanted certain exemptions to municipal expenditures to be taken off the table and he also originally said that 60 percent of the voters in a municipality would have to approve a local initiative to raise property taxes more than the 2.5 percent cap.  The Democrats wanted a 2.9 percent cap and refused to budge on amending the state’s constitution.  They felt that this had to be done by legislation because changing the constitution seemed too radical. 

 

Well, contrary to conventional wisdom, Governor Christie, in fact, compromised.  He took the constitutional amendment off the table and said he would go along with capping property taxes by legislative statute.  Further, he worked with the Democratic leadership on which exemptions would be excluded from a property tax cap.  Ultimately, it was agreed that pension and health premiums for public employee workers would be exempt from the cap.  In addition, there is an exemption for debt service and states of emergency.  The governor also compromised by moving from a 60 percent voter approval level to 50 percent, which is more reasonable.  Finally, Christie and the Democrats agreed to a 2 percent cap, significantly lower than the 2.9 and 2.5 percent caps they were debating. 

 

This is big news, and while there are still exemptions to the cap, what’s hopeful is that the governor and the legislature will come together to create the so called “tool box” of reforms that will help local governments get pensions and health care costs of public employees under control.  This 2 percent cap on property taxes is potentially a national model for other states to follow.  It demonstrates that a Republican governor and a Democratic legislature (or vice versa) can and will work together for the public good.  Are there politics involved in a lot of this?  Of course.  Because, neither party wanted to be blamed for standing in the way of the state’s first significant effort to control skyrocketing property taxes.  But, that’s good politics, isn’t it?  That’s politics that makes sense. 

 

The State Assembly has to give final approval to the 2 percent cap, but there is every reason to believe that Speaker Sheila Oliver will do the right thing and be a part of this effort along with her Democratic colleagues.  Let’s just hope that the momentum continues and that Governor Christie, Senate President Stephen Sweeney and Speaker Oliver continue to do the right thing and find solutions to New Jersey’s nagging problems that have been ignored or made worse over the years. 

 

Like I said, the property tax dilemma is far from solved, but it feels good to say good things about those who serve in public office because, sure enough, in the near future there will undoubtedly be an opportunity to be critical—and, yes, cynical—about politics in our state and nation.  But, for right now, three cheers for our leaders in the Statehouse who hit the right chord at the right time.  Let the music play on.

NJ Property Tax Cap on Target