The announcement by Governor Christie and leaders of the legislature that property taxes would be capped at two percent through legislation rather than through the amendment process was a victory for good public policymaking. By preserving the integrity of the constitution, lawmakers will have needed flexibility to respond to unforeseen economic conditions.
Governor Christie’s proposal to submit a constitutional amendment to cap property taxes at 2.5 percent to the voters was a classic example of “doing the wrong thing for the right reason.”
Inserting a policy decision such as the tax cap undermines the significance and importance of the constitution. Simply put, the provisions in the constitution should be limited to fundamental law. The constitution should provide the structure of government and the rules by which government institutions must abide and political decisions be reached. Using the constitution to promote political or policy objectives diminishes the document. Most people understand that the constitution should contain enduring principles and should not be used to reflect the latest public sentiment on every issue.
Furthermore, amending the constitution to include specific policy decisions is not sound public policy making and at best is short sighted. The 2.5 percent cap sounds reasonable during periods of low inflation, but what will happen if the various stimulus packages crafted by the federal government cause inflation or worse, hyper-inflation, as some economists fear? A tax cap of only 2.5 percent will cause a reduction in fundamental services that could be disastrous for some communities. The cap rate is appropriately left to the policymakers in the legislative and executive branches of government. These individuals can best respond to the economic and other conditions that affect the rate of property tax increases.
Another wild card that the governor’s proposal does not take into account is the role of the New Jersey Supreme Court. As the governor has observed, the court is an activist one, and as it has in the past, can easily redefine the meaning of numbers inserted into the constitution or other legislation to suit its purposes.
The Democratic counterproposal, while flawed by allowing too many exceptions for exceeding the proposed 2.9 percent cap, is a sounder approach to this problem. A policy crafted by the legislature and the executive with few exceptions will give local governments the ability to cope with unforeseen circumstances that are precluded by the constitutional amendment. The proposal can be further strengthened by creating a review process to ensure that only extraordinary circumstances result in property tax rates exceeding the 2.5 or 2.9 cap.
Note to readers: This is my last contribution as Dean of the College of Arts and Sciences at Seton Hall University. Effective August 1, 2010, I shall begin serving as Provost/Vice President for Academic Affairs at La Salle University in Philadelphia. I shall continue to reside in New Jersey and will continue to observe and comment on New Jersey government and politics.
