GSCS ‘QUICKNET’ 7-28-06 from Trenton

 

7-28-06 Gov to legislature: make history, cut taxes …..
Read here multifaceted reporting from the Star Ledger about the special session on property taxes today, including Live from the Ledger report on the session...The Governor's approach is fiscally thought-through, very comprehensive and mixed with compromise and pain...and a very big assignment for the legislature, which is now in charge of next steps. Four legislative Task Forces are to be announced on Monday, and will be meeting for the remainder of the summer and likely into early fall. The process is promised to be public and hearings will be scheduled throughout the state. However, there is so much on the table to get through it will be, at the very least, interesting to see if Trenton can meet the task and effect change that is positive for the common good of the state while not challenging the quality and delivery of the public education programs in our schools.

 

 

Live from the Ledger:  Governor Corzine’s Statehouse speech

                                                                                          Noon, Friday 7-28-06

Corzine to lawmakers: Make history, cut taxes
Gov. Jon Corzine urged lawmakers to "make history" and finish, by the end of the year, a plan to cut New Jersey's highest-in-the nation property taxes and provide lasting reform "to make it stick."

"We cannot let this moment pass," Corzine said in a rare summer Statehouse speech this morning to kick off a special session on property taxes. "We must make history."

Repeating that he wanted "action, action, action," the governor said property taxes must not rise by more than 4 percent a year. He told lawmakers that after years of failing to cut them, "everything must be on the table" and that political leaders must be able to tackle all the most difficult political issues: "the sacred cows, third rails, 800 pound gorillas."

That includes potential tax increases, prodding towns and schools to merge, cutting public employee pension and health benefits, allowing towns to assess other taxes or impact fees, and changing how New Jersey funds public education.

"It will take years to fully correct the situation but it is absolutely imperative that we begin today," Corzine said in a 30-minute speech interrupted nine times by applause. "The property tax burden is simply overwhelming to our citizens and their economic well-being. If we were a business, we would be bankrupt."

Corzine then offered a plan to bring short-term relief to property taxpayers and then lasting reform to make sure property taxes are controlled.

He said he wants to replace rebate checks with direct credits "that will lower the (property tax) bills that someone pays." He suggested combining $350 million of the just-enacted sales tax increase with current rebate allocations to provide $1.6 billion in property tax credits to senior citizens, and middle class families.

Corzine also called for reducing pension and health care benefits for all new and recently hired public employees. He said New Jersey's longstanding tradition of "home rule" must be attacked so the state can prod towns and schools to share services or combine. He said he would find ways to reduce public debt to provide more dollars for property tax relief, and left open the possibility that other taxes could rise - including allowing local governments to assess their own taxes. He said the state must change an "unfair" system of funding schools.

The governor called for a 4 percent limit on how much property taxes can rise. He told lawmakers that while he supported a constitutional convention on property taxes, it won't be needed if lawmakers provide real reform. He said if they don't by the end of the year, he will call for a citizen’s convention.

The governor noted that 46 percent of all tax dollars in New Jersey comes from the property tax, and that the national average is about 30 percent.

"Frankly, never in my life have I wanted to be so average," he said.

Lawmakers today plan to pass a proposal to dedicate half the revenues from the recent 1-cent increase in the state sales tax to property tax reform. Since this is a change in the state constitution, it must be approved by voters. The question will appear on the ballot this November.

Also, the legislators will form four committees that will meet and address property tax reform in the coming weeks. The six-person committees are expected to be made up of four Democrats and two Republicans. There will be three representatives from each house.                                                                                Contributed by Tom Martello

Corzine prepares a new fiscal order

Governor to make broad proposals today that stress link between property taxes and budget woes

Friday, July 28, 2006

BY JOE DONOHUE AND TOM HESTER

Star-Ledger Staff

Gov. Jon Corzine today will unveil far-reaching proposals to ease New Jerseyans' property taxes and the state's chronic budget problems, including adding hundreds of millions of dollars in aid to suburban schools and possibly selling the New Jersey Turnpike to cut the state's debt.

With the state suffering from annual budget shortfalls and its homeowners struggling to pay tax bills that average nearly $6,000, Corzine has decided a bold, comprehensive plan is needed to address both problems, several Statehouse sources said.

The former Wall Street investment banker's prescriptions for New Jersey's fiscal ills include tighter cost controls at all levels of government and less generous fringe benefits for state workers. He will propose direct state credits on local property tax bills and an incentive fund to encourage towns to share services.

The governor's speech will kick off a special legislative session dedicated to reducing the pain of the property taxes, which pay for local government services and public schools.

Corzine will emphasize connections between the state government's money problems and the burden on local taxpayers, aides said yesterday.

Nearly half the state budget already goes to municipalities, counties and school districts, and Corzine is expected to argue the state would be hard-pressed to increase that aid unless it drastically reduced other expenses -- such as the $2.8 billion in annual payments on the state's debt.

The governor will direct Treasurer Bradley Abelow to study the idea of selling or leasing large state assets -- like the Turnpike or the State Lottery system -- and using the proceeds to pay off a big chunk of the $33.1 billion state debt, according to an administration official and a legislative source.

Spokesman Brendan Gilfillan would say only: "The governor will speak to a variety of factors that are behind increasing property taxes and will focus on delivering real reform to New Jerseyans, who have dealt with this burden for far too long."

According an administration source, Corzine will recommend using technology that will be available by the next budget year to directly lower local property tax bills by issuing tax credits. The source did not indicate whether the credits would replace rebate checks, a move that could save more than $10 million in administrative costs.

The governor also is expected to propose that state aid for education be distributed based on the number of poor and special-education students in each district, according to sources who were briefed by administration officials. The plan would not reduce aid to the 31 mostly urban "special-needs" districts but could distribute close to $1 billion to nearby districts that are nearly as strapped and to suburban districts for their special education and poor children.

To address the rising costs of state worker benefits, Corzine will recommend consideration of a two-tiered pension system that retains the vested rights of current workers but introduces changes for new hires, such as 401(k)-style plans and a higher retirement age.

Corzine also will seek to dedicate $250million from the newly increased state sales tax for a "re-engineering fund" to provide financial incentives to schools and local governments that share services and reduce costs.

To further constrain the cost of government, Corzine will propose tight caps on either tax increases or budgets, officials said.

As part of the special session, the Senate and Assembly plan to appoint four joint committees to focus on changing school funding, consolidating local services, controlling employee benefits and possibly promoting a "citizens convention" to write tax reform into the state constitution.

Senate President Richard Codey (D-Essex) yesterday introduced a resolution forming the four committees and requiring them to report to the governor by Nov. 15 unless an extension is jointly approved by Codey and Assembly Speaker Joseph Roberts (D-Camden). Each panel will have eight Democrats and four Republicans, with equal numbers from the Senate and Assembly.

Although it was part of his election campaign platform, Corzine is not expected to emphasize a citizens convention, because Democratic lawmakers are concerned about putting such a controversial question on the ballot next year, when they will be seeking to keep their majorities in both houses.

Two legislative committees heard testimony yesterday on a constitutional amendment to dedicate a half-cent of the 7-cents-per-dollar sales tax to property tax relief. This year, that would amount to $600million. That tax relief measure was part of an agreement ending a budget stalemate between Corzine and Roberts that forced a weeklong state government shutdown earlier this month. The proposed amendment is expected to clear both houses of the Legislature today, and the final say would be up to voters in November.

Democratic lawmakers described the proposal as a "down payment" on property tax reform. "People are frustrated with property taxes and they are demanding results," said Assemblyman Jack Conners (D-Burlington).

But Republicans said Democrats should have spelled out exactly what they plan to do with the money so it won't become a political slush fund. "I think it's a big ruse. Meaningful property tax relief has to come from cuts and not just moving shells around on the table," said Assemblyman Sean Kean (R-Monmouth).

Also yesterday, Sen. Stephen Sweeney (D-Gloucester) and Assemblyman Paul Moriarty (D-Gloucester) said they will push legislation to reduce the cost of fringe benefits to state and local government workers by 15 percent. Their proposals include raising the retirement age, now 55, to 60 for new employees, eliminating lifetime health benefits for new employees and their dependents, and abolishing the practice of paying for unused sick time and vacation days. Sweeney and Moriarty also want to mandate a 40-hour week for new employees.

Sweeney, an ironworkers union official, drew the anger of state worker unions when he went public with a number of the proposals during the budget crisis. But he said the public feedback was encouraging: "We have received thousands of e-mails and fielded hundreds of phone calls from taxpayers throughout the state voicing support for these measures."

Joe Donohue covers state government and politics. He may be reached at jdonohue@starledger.com or (609) 989-0208.


© 2006  The Star Ledger

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http://www.nj.com/images/news/0728_taxb.jpg     Pros and Cons/What’s on/not  the table

http://www.nj.com/images/news/0728_govtc.jpg   Towns w/ highest-lowest prop tax bills

http://www.nj.com/images/news/0728_govta.jpg   The burden – how Ledger compares

http://www.nj.com/images/news/0728_govtb.jpg   Tackling Taxes

http://www.nj.com/images/news/0728_taxa.jpg     Average property tax bill