In a column published in The Star Ledger and at NJ Spotlight, Mark Magyar says no. Magyar says that like all the governors before him, except Florio, Christie is simply tinkering at the margins and that whether Christie serves one term or two, New Jersey’s property taxes will still be the highest in the nation.
Magyar, who was a policy advisor to Chris Daggett’s Independent gubernatorial campaign against Christie and Jon Corzine, makes the case that unless New Jersey increases income taxes and sales taxes with the State taking over a higher burden of education funding, that property taxes will continue to be a dispropotionate and inequitable source of funding for education and government services.
A good tax system is generally considered to be one in which income, property and sales taxes are in some rough balance, with each providing somewhere between 30 percent and 40 percent of total revenue for these three major taxes. That is the case in most states, but it is not the case in New Jersey, where property taxes actually make up 58 percent of the income/property/sales tax pie, with income taxes accounting for just 24 percent and sales for the remaining 18 percent.
The only way to actually lower property taxes in New Jersey to a competitive level with other states is to shift billions of dollars of the cost of K-12 education or municipal or county services to another major tax or taxes — with the income and sales taxes being the most logical choices — while simultaneously making sure that an effective cap prevents any new increase in school district and local government spending.
That is what Democratic Gov. Jim Florio tried to do in 1990 when he dedicated half of his $2.8 billion tax package to property tax relief, but most of the money was quickly eaten up by school districts and municipalities for new spending, and by the second year property taxes were rising again as rapidly as ever. Voter repudiation of Florio led to the election of a Republican legislature and GOP Gov. Christie Whitman, and scared politicians in both parties away from any meaningful attempt at overall tax reform.
However, Magyar’s argument is a non-sequitur to the current debate happening in Trenton (and nationally).
Even if Christie and the legislature were to institute Steve Lonegan’s flat tax, increasing income taxes on the poor and middle class while reducing them on the rich, and even if they instituted Chris Daggett’s $4 billion sales tax increase, and used the new revenue to reduce property taxes, the problems that Christie is addressing would remain. They would just be paid for differently.
New Jersey, and many other states, has too much government. There are too many government employees making too much money and getting benefits that are too generous to sustain regardless of how the revenue is generated.
It is only by reducing the size of government on all levels, which means less government employees making less money with less generous pensions and benefits, that our overall tax burden will decrease. That is what Christie’s reforms are designed to do. By forcing the downsizing within the current system, rather than radically changing the way New Jersey taxes its citizens and then implementing cuts, Christie is demanding that municipal, county governments and school boards make the hard choices now. If Christie did it Magyar’s way, government and taxes would continue to expand.
Let’s first reduce the size of our governments. Once that is done we can address the way we pay for them.
While municipalities and school boards throughout New Jersey are struggling with budget cuts and layoffs of teachers, police and other public workers, over in Rumson they’re fighting over whether the spring crew program will be administered by the Rumson Recreation Department or by Rumson-Fair Haven Regional High School, according to a post this morning at RedBankGreen.
People who participate in crew are very passionate about it.
Growing up in Bergenfield, we didn’t have a crew team. Not one run by the Recreation Department or by the High School. The nearest river was the Hackensack. I guess it didn’t occur to anyone to row there.
At Georgetown I had some friends on the crew team. My roommate would get up before dawn and run, so he told me, like really run hard, down to the Potomac where the team would row for a couple of hours and then run up and down the stairs from the Exorcist movie for a while. I knew it was time to get up for my first class when I smelled him come back into our room and heard his groaning.
My girlfriend’s roommate was a coxswain. She was less than five feet tall and weighed less than 100 lbs. She got up before dawn too, did the running thing, and then sat on the back of the boat yelling at all of the guys through a bullhorn who did what she said. She loved it.
They all seemed very passionate about it. I didn’t get it, but I was happy for them. But I digress.
Why would smart adults be having a turf war over the crew team? That’s tougher for me to get my head around than trying to understand what my friends were so passionate about 35 years ago.
I don’t know the ins and outs of the issues is this controversy. The RBG article indicates it has something to do with which government entity owns the equipment. Doesn’t it all belong to the taxpayers? Ahh, but which taxpayers, Rumson’s or Fair Haven’s? Muncipal or School Board?
I suppose this is an opportunity to teach the kids a lesson in politics and red tape. Maybe they already mastered commitment, teamwork and the other character building lessons of scholastic athletics.
I never heard of an award winning Recreation Department sports team. I never heard of a kid earning a college scholarship based upon his or her performance on a Recreation Department team. But like I said, I’m not an expert on crew. Maybe somone from Princeton or the Philadephia Main Line could clear it up for me.
In the meantime, I bet that if the powers that be in Rumson and Fair Haven focused on what is best for the kids that the politics and red tape could be solved quickly. Wouldn’t that be a great lesson.
Lastly, it’s important to note here as well, that this is the product of compromise. Now, compromise can be reached in a variety of different ways, through a variety of different paths, but I want to thank the Senate President and the Speaker and the Minority Leader of the Senate and of the Assembly for traveling on this journey to the compromise with me. It is extraordinarily important that we all stand up for the principles we believe in, but also recognize that we are sent here to get the work done that the people have sent us here to do. Mayors, council people, have been crying out for this reform for a long time. And I suspect that if myself, the Speaker, and the Senate President along with the minority leaders had told you back in January of 2010 that by December of 2011, we would have a 2% hard cap on property tax levies, and a 2% hard cap on interest arbitration awards, you probably would have told us we were crazy. This is the product of people standing up for their principles, listening to the people who voted for us, and compromise where compromise is needed. The last part which I forgot, is this mirrors the 2% levy cap in respect that pension and healthcare benefits are excluded from the cap. However, the other commitment that we have made to each other and all of this have said this repeatedly over time, is that when we return in January to our work that we are going to get pension and health benefit reform benefit done. Each one of these things is a building block to finally controlling property taxes in New Jersey. We’ve got the levy cap, we’re dealing with interest arbitration, we have some other tool kit items that we’re going to have to turn to as well and then we’re going to turn to pension and health benefits as well. We’ve made that commitment to each other both privately and publically. So again, I thank the leaders of the Legislature for their willingness to work with me, their willingness to compromise, and to come to an agreement that makes sense for the people in the state. There’s nothing more important than getting property taxes under control in this state and changing the system. And I think for the first time in a long time, we have taken meaningful steps towards doing that.
Conditional Veto Expands and Strengthens Bill Provisions to Better Protect Taxpayers and Provide Relief for Strained Local Budgets
Trenton, NJ – Governor Chris Christie today issued a conditional veto of Senate Bill 2220, a tool kit bill and element of the Christie Reform Agenda, to strengthen and improve upon the bill and more effectively stop the abuse of sick and vacation benefits, or supplemental compensation. While the bill accomplishes a large part of Governor Christie’s reform goals for these benefits, the Governor has identified provisions in the bill that can be improved upon to further assist strained local budgets and help meet the reality of Cap 2.0.
“This bill represents a good-faith continuation of the public employee benefits reform I signed into law earlier this year that will serve as a critical cost-savings tool for municipalities and school boards that must live within our property tax cap. I applaud the bill sponsors and the legislature for taking action on this critical reform measure. By working together, as we have in the preceding days, we are showing New Jerseyans and the country that real change is possible when to come together to work on real, meaningful solutions, in the public’s best interest,” said Governor Christie. “The changes I’ve put forward for this legislation make common sense and important improvements to strengthen the bill’s provisions and more effectively curb the unreasonable and abusive public employee payouts that come at the public’s expense.”
Governor Christie urged the legislature to act quickly to adopt the substantive changes in the conditional veto, and continue building upon the progress that has been made on critical elements of the Christie Reform Agenda, including comprehensive reforms to the interest arbitration system announced today.
“In these difficult economic and budgetary times, New Jersey taxpayers can no longer be asked to foot the bill for a system that is rife with waste and abuse. Sick days provide time off for employees who are sick, and do not represent an additional form of compensation for employees who are fortunate enough to remain healthy. Whatever rationale once justified this type of abuse, the time has come for the practice to end,” added Governor Christie. “Those individuals who abuse the public trust must not be allowed to further exploit the system for their own enrichment. The changes identified by my Administration and addressed in this conditional veto go further to put an end to these practices. I urge the legislature to continue the important progress we’ve made in delivering real reform to the people of New Jersey by acting quickly to adopt these changes and providing an important element of the tool kit to local governments.”
Governor Christie’s Conditional Veto makes the following improvements to S-2220, to improve and strengthen the legislation, better protect taxpayers and provide even greater budgetary relief to municipalities:
Strengthen the public trust by suspending supplemental compensation for any employee under indictment for a crime that involves or touches his or her public office, and mandate the forfeiture of any supplemental compensation if convicted;
Phase out the practice of distributing cash payouts for sick days by prohibiting supplemental compensation for sick days that accumulate after the effective date of the legislation for all state, local government and school district employees;
Require that sick days accrued prior to the effective date of this legislation be used before those days accrued after the effective date;
Expand to all current employees at any point during their employment, not just hires after the effective date of the bill in the twelve months before retirement, the requirement that a physician provide written verification for use of six or more consecutive sick days; and
Require that vacation days accrued prior to the effective date (those not subject to the one-year carry forward provision) of this legislation be used before those days accrued after the effective date (those subject to one-year carry forward restriction).
Senator Jennifer Beck, Assemblyman Declan O’Scanlon and Assemblywoman Caroline Casagrande will be hosting the fourth in a series of informational sessions on Governor Christie’s Property Tax Reform Toolkit on Wednesday, December 8th at the regular meeting of the Colts Neck Township Committee at 7:30 p.m
Similar informational presentations have taken place throughout the 12th District in Marlboro, Tinton Falls, and Manalapan. The Legislators give a presentation on how enacting these reforms will benefit municipalities, followed by a question and answer period. All area residents are encouraged to attend and learn more about how these proposed reforms will help make New jersey a more affordable place to live.
