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Thank you to the parent and community advocates who have sent literally thousands of emails and calls to legislators and the Governor regarding their concerns about these bills. GSCS remains opposed to elements in both bills, together with your steadfast help, we will continure to pursue amendment legislation re A1 and A4....Click on MORE below to read: recap news articles on the bill signing; Fiscal Analyses of the bills (including bill descriptions) by the Office of Legislative Services (OLS); and press release from the Governor's office.//........ Corzine: 'Tax relief is real' Posted by The Star-Ledger April 03, 2007 12:15PM
Corzine signs property tax cut bill Posted by the Asbury Park Press on 04/3/07 ASSOCIATED PRESS
"...Karen Bartholomew, of Teaneck, said she was pleased to get more property tax relief and hoped it would continue, but worried nothing was being done to redo New Jersey's heavy reliance on property taxes to pay for schools.
"It's truly out of control," she said. "There has to be a better way to fund the schools..."
Corzine: 'Tax relief is real'
Posted by The Star-Ledger April 03, 2007 12:15PM
Gov. Jon Corzine wrapped up the Legislature's attack on property taxes today, signing a bill that includes $2.2 billion in property tax subsidies for homeowners and a 4 percent cap on local government tax increases.
"The tax relief is real. The credits are real and they're on their way," Corzine said in a bill-signing ceremony at the Trenton War Memorial, near the Statehouse.
Corzine also signed a second tax reform bill (A-4) that imposes restrictions on school spending, and sets up new county school superintendents with the authority to veto local board budgets.
The cap and credit program, which promises most homeowners a state payment to offset up to 20 percent of their 2006 property tax bill, is the centerpiece of the Legislature's nine-month special session designed to relieve residents from soaring property tax bills.
Statewide the program will send state payments averaging $1,070 apiece to about 1.3 million homeowners under age 65 who earn less than $250,000. About 500,000 homeowners who are over age 65 or disabled qualify for payments averaging $1,205. The program also includes $252 million in tax subsidies for renters, double the amount currently offered to them.
Besides the two measures signed this morning, lawmakers also have enacted legislation that sets up a special committee to target school boards and municipal governments for elmination through merger (S-15) and that establishes a new Office of State Comptroller to monitor government spending (S-12).
"It was a bloody process, a bruising, process, a not-very-pretty process, but a process with a beautiful outcome," said Assembly Speaker Joseph Roberts (D-Camden).
Critics say the measures approved were stripped of their most potent elements, and that they will do little to stop the rise of property taxes over the long-term.
The new tax credit program replaces the existing Homestead Rebate program for most homeowners, and distributes benefits based on a homeowner's income.
Homeowners earning up to $100,000 are scheduled to collect credits worth 20 percent of their property tax bills; those earning between $100,001 and $150,000 receive credits worth 15 percent and those earning between $150,001 and $250,000 qualify for credits worth up to 10 percent of their 2006 property tax payments.
For an estimate of how the plan will affect you, visit The Star-Ledger's New Jersey by The Numbers at nj.com/news/bythenumbers/, and check out the Property Tax link.
Contributed by Dunstan McNichol
Corzine signs property tax cut bill
Posted by the Asbury Park Press on 04/3/07
ASSOCIATED PRESS
TRENTON — Besieged by America's highest property taxes, most New Jersey homeowners will get a 20 percent property tax cut later this year under a tax relief package signed into law today.
The measure also aims to cap annual property tax increases at 4 percent.
New Jersey property taxes average about $6,330 per homeowner, or twice the national average, and have been increasing 7 percent per year.
"This is the double-dose of property tax reform and relief taxpayers have asked for and so desperately need," said Assembly Speaker Joseph Roberts Jr., D-Camden.
Property taxes have consistently been cited in polls as the leading concern of New Jerseyans.
"Rest assured, the totality of our efforts will produce long-term reform, and in the interim taxpayers will get much-needed relief now," said Senate President Richard J. Codey, D-Essex.
Gov. Jon S. Corzine also signed into law a bill creating powerful county school superintendents with authority to veto local school spending, though schools could appeal to the state. The superintendents will also recommend to voters a plan to merge schools.
Not everyone is as optimistic help is coming.
Cy Thannikary, 73, who has watched property taxes climb annually on his small retirement community home in Upper Freehold, called the tax relief effort a "pre-election show and tell" and said the measure isn't much different than previous efforts to quell property taxes.
"What they are giving us a shell game," Thannikary said.
Republicans have questioned whether the cut can be sustained after this year, when all 120 legislative seats will be decided in November's election.
Karen Bartholomew, of Teaneck, said she was pleased to get more property tax relief and hoped it would continue, but worried nothing was being done to redo New Jersey's heavy reliance on property taxes to pay for schools.
"It's truly out of control," she said. "There has to be a better way to fund the schools."
Under the tax relief plan, households earning up to $100,000 will get a 20 percent cut, up to $150,000 will get a 15 percent cut and up to $250,000 will get a 10 percent cut. The cut will average $1,051 per household.
About 1.9 million of the state's 2 million households will get help, with 800,000 renters also getting increased relief.
The plan is the centerpiece of a monthslong effort by Democrats who control state government to cut property taxes that pay for most county, municipal and school operations.
Assemblyman John Burzichelli, D-Gloucester, predicted the measure will "put the brakes on runaway property taxes and give residents the real relief they deserve."
The money was to be delivered as credits to property tax bills, but if that system cannot be created this year, checks will be sent to homeowners.
The money will replace rebate checks that last year delivered up to $1,200 to senior citizens and up to $350 to others. The plan guarantees that seniors would receive no less than they got last year. The plan will be funded with $900 million used on rebates and $1.4 billion from the sales tax.
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LEGISLATIVE FISCAL ESTIMATE
CORRECTED COPY
ASSEMBLY, No. 1
STATE OF NEW JERSEY
212th LEGISLATURE
DATED: FEBRUARY 14, 2007
SUMMARY
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Synopsis: |
Establishes homestead credits to reduce property taxes; imposes 4% cap on local tax levies; permits Local Finance Board to define capital and non-bondable current expenses; makes an appropriation. |
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Type of Impact: |
State expenditure increase; possible decrease in local property tax revenue. |
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Agencies Affected: |
Departments of the Treasury, Education and Community Affairs; counties, municipalities, local school districts, special taxing districts. |
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Office of Legislative Services Estimate | ||||
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Fiscal Impact |
FY 2008 |
FY 2009 |
FY 2010 |
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State Cost |
$1.186 billion |
Indeterminate but similar level |
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Local Property Tax Levies |
Indeterminate Potential Restraint of Growth Rates-See Comments Below |
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· The Office of Legislative Services (OLS) estimates that this bill will increase State expenditures for homestead property tax rebates and credits by about $1,186,000,000 in FY 2008, and by indeterminate amounts in succeeding fiscal years. Homestead property tax relief for homeowners would increase by $1.06 billion, and homestead property tax relief for tenants would increase by $126 million in FY 2008.
· The OLS estimates that this bill would provide homestead property tax rebates and credits averaging $1,205 to about 500,000 senior and disabled homeowners, and homestead property tax rebates and credits averaging $1,070 to about 1,300,000 non-senior homeowners.
· This bill provides property tax credits of 20 percent of the first $10,000 in property taxes to homeowners with income of $100,000 or less; property tax credits of 15 percent of the first $10,000 in property taxes to homeowners with income between $100,000 and $150,000; and property tax credits of 10 percent of the first $10,000 in property taxes to homeowners with income between $150,000 and $250,000.
· This bill requires a minimum FY 2008 appropriation for tenants’ property tax rebates of at least two times the FY 2007 appropriation, or $252 million.
· The OLS estimates that new local property tax growth limits (“caps”) may result in lower local property tax levies than would otherwise occur under existing law, by indeterminate amounts. The bill establishes new four percent caps on annual increases in the property tax levies of school districts, counties, municipalities and special taxing districts.
BILL DESCRIPTION
The Corrected Copy to Assembly Bill No. 1 of 2007 provides a homestead property tax credit for New Jersey resident homeowners; provides for increased funding for residential tenants’ property tax rebates; and establishes a property tax levy growth limitation (hereafter, “cap”) of four percent that is applicable to school districts, counties, municipalities, fire districts, and solid waste collection districts.
Homestead Property Tax Credit
Sections 19 through 39 of this bill establish a homestead credit program for New Jersey homeowners. The credit program retains the current rebate program’s definition of income and provides a benefit based on a percentage of property taxes paid for the previous year. The percentages vary based on three income levels: 20 percent for incomes up to $100,000, 15 percent for incomes over $100,000 up to $150,000, and 10 percent for incomes over $150,000 up to $250,000. Taxpayers with incomes over $250,000 receive no benefit. If a property tax bill is higher than $10,000, the benefit only applies to a percentage of the first $10,000 of property taxes paid. The benefit amounts do not vary based upon a taxpayer’s age or disability status.
For homeowners who are senior citizens, blind or disabled, the bill retains the current calculation of property tax rebates as well as extending eligibility for the new credit, and provides whichever is the greater benefit. Under the current calculation, the homestead benefit for the tax year equals the amount by which property taxes paid by the claimant in that tax year on the claimant's homestead exceed 5 percent of the claimant's gross income, with certain maximum and minimum benefits. Most of these homeowners are eligible for a benefit of $1,200.
The new benefits will be provided to taxpayers in the form of a credit rather than a rebate. However, the Director of the Division of Taxation retains the discretion to provide rebates when there is uncertainty that the benefit will be accurately provided to the correct taxpayer. In addition, seniors will receive the benefit as a rebate in the first year, and may individually choose to continue to do so in following years. Credits will be reflected annually in the August and November property tax bills beginning in 2007. A taxpayer must reside in a homestead on October 1 of a tax year to be eligible for the credit. The bill requires each property tax bill to show the taxpayer the amount of credit the taxpayer receives, and makes additional technical changes to statutes affecting the format and content of tax bills.
Increased Funding for Residential Tenants’ Property Tax Rebates
Section 40 of this bill requires that for the fiscal year beginning July 1, 2007, the sum to be appropriated for homestead property tax rebates for residential tenants shall be not less than twice the amount appropriated for the same purpose in the prior fiscal year. Amounts appropriated for this purpose are to be allocated in a manner prescribed by law.
Property Tax Levy Caps
Sections 2 through 7 of this bill establish a four percent cap on annual increases in the property tax levy for each school district, with certain exceptions. During the first school budget year following enactment of this bill, a school district would be authorized, as under current law, to seek voter approval to exceed the maximum levy. After the first year, a school district would need approval by at least 60 percent of the voters to exceed the maximum levy. After the first year, a school district also would be able to seek a cap waiver from the Commissioner of Education for limited categories or purposes, instead of or prior to seeking voter approval.
Sections 9 through 11 of the bill establish a four percent cap on annual increases in the property tax levy for counties, municipalities, fire districts, and solid waste collection districts, with certain exceptions. In the case of a county, this new levy cap applies in addition to the existing levy cap, with the more restrictive of the two prevailing. In the case of a municipality, this new levy cap supplements existing limits on increases in municipal expenditures. This bill further establishes a new four percent cap on increases in fire district and solid waste collection district tax levies; these local entities currently are not subject to any expenditure or levy growth caps. The Local Finance Board would be authorized to grant cap waivers in certain circumstances.
Other Provisions
Sections 42 through 45 of the bill permit local governments, including local boards of education, to modify, through collective negotiations agreements with their active employees, the payment obligations of the employer for active employee coverage under the State Health Benefits Program (SHBP). The ability to negotiate the amount of SHBP premium or periodic charges to be paid by the employer has been available to the State since 1997, and to local governments with regard to their future retirees since 1999.
The bill also permits all local units of government (including boards of education, county colleges, and local authorities) to establish cafeteria plans pursuant to section 125 of the federal Internal Revenue Code, 26 U.S.C.'125, to provide for a reduction in an employee’s salary, through payroll deductions or otherwise, in exchange for payment by the employer of medical or dental expenses not covered by a health benefits plan, of dependent care expenses as provided in section 129 of the code, 26 U.S.C.'129, and of such other benefits as are consistent with section 125 which are included under the plan. The amount of any reduction in an employee’s salary will continue to be treated as regular compensation for all other purposes, including the calculation of pension contributions and the amount of any retirement allowance, but, to the extent permitted by the federal Internal Revenue Code, will not be included in the computation of federal taxes withheld from the employee’s salary.
Section 46 of the bill appropriates to the departments of Community Affairs and Education funds necessary for the administrative costs of implementing the tax levy caps. The bill also appropriates funds necessary for the administrative costs of implementing the credit program, in an amount determined by the Director of the Division of Taxation in the Department of the Treasury, with the approval of the Director of the Division of Budget and Accounting.
FISCAL ANALYSIS
EXECUTIVE BRANCH
The Department of the Treasury provided information on which the OLS based its estimates of the fiscal impact of the homestead credit program established in this bill.
OFFICE OF LEGISLATIVE SERVICES
Property Tax Credits and Rebates: The OLS estimates that this bill will increase State expenditures by about $1,186,000,000 in FY 2008. The property tax credit in part replaces and in part supplements the FAIR homestead rebate program for homeowners and tenants. The table below displays the homeowner and tenant components for the FAIR program in FY 2007, for the estimated FY 2008 results of this bill , and the net estimated cost increase to the State.
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Corrected Copy Assembly Bill No. 1 Credit/Rebate Cost Estimate | |||
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FY 2007 Approp. |
FY 2008 Est. |
Net Cost Increase |
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Homeowners |
$931 million |
$1,991 million |
$1,060 million |
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Tenants |
$126 million |
$252 million |
$126 million |
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Total |
$1,057 million |
$2,243 million |
$1,186 million |
After FY 2008, the annual cost of the program should increase at a rate somewhat below the annual rate of growth in residential property taxes (a rate which the OLS is unable to estimate due to myriad determinants, e.g., local spending, revenue and taxing decisions, changes in the composition of the property tax base). The applicability of the credit to only the first $10,000 of property taxes effectively restricts the rate at which the cost of the credit can increase. Moreover, the three income thresholds (at $100,000, at $150,000, and at $250,000) in the bill will reduce or eliminate some credits as recipient income grows.
The estimates are based on OLS extrapolations of state Department of the Treasury data. For estimates of property taxes, the OLS used 2004 data from a statistical match of gross income tax data, FAIR homeowner data, the MOD IV property tax data. For estimates of the number of potential recipients, the OLS used FY 2005 FAIR data. The OLS then extrapolated these data to estimate the impact in FY 2008. The extrapolations indicate that this bill would affect about 500,000 senior and disabled homeowners, for an average credit amount of about $1,205, and affect about 1,300,000 non-senior homeowners, for an average credit amount of about $1,070. The OLS notes that extrapolations from detailed but incomplete data are subject to some degree of error.
The maximum credit any recipient with income of $100,000 or less could receive is $2,000 (20 percent credit against a $10,000 maximum property tax). The maximum credit any recipient with income between $100,000 and $150,000 could receive is $1,500 (15 percent credit against a $10,000 maximum property tax). The maximum credit any recipient with income between $150,000 and $250,000 could receive is $1,000 (10 percent credit against a $10,000 maximum property tax). Senior, blind and disabled homeowners would continue to receive a benefit calculated under the current FAIR program if that calculation produces a larger benefit. Homeowners with income over $250,000 would be ineligible for the credit. The OLS estimates that about 94 percent of primary residents would be eligible, although this percentage would decline over time as incomes rise and additional homeowners cross above the maximum threshold.
The bill requires in FY 2008 a doubling of the FY 2007 appropriation for tenants’ property tax rebates. The manner in which increased funding would be allocated would be determined by another subsequent law. About 100,000 senior or disabled tenants and 700,000 other tenants currently receive these benefits. The bill does not address funding for tenants’ tax relief beyond FY 2008.
Local Property Tax Caps
The OLS estimates that new local property tax caps may result in lower local property tax levies than would otherwise occur under existing law, by indeterminate amounts. The OLS notes that local budgetary decisions that determine annual changes in local property tax levies are affected by multiple factors, such as the provisions of labor contracts, costs of goods and services, levels of local non-property tax revenues, debt service requirements and the number of pupils required to be educated by local school districts. It is reasonable to conclude that the new tax levy caps comprise greater restraints on annual property tax increases than the restraints imposed under current law, but it is not feasible to estimate the degree to which this is the case, or to quantify the amount by which future property levies would be lowered by the effect of these new caps.
State operating expenditures may increase as a result of administering new tax levy caps, by an indeterminate amount. The OLS lacks sufficient information about current costs and operational practices of the departments of Education and Community Affairs with which to develop an estimate of a level of spending adequate to implement and administer new caps.
State operating expenditures may ultimately decrease by indeterminate but modest amounts as the means of providing homestead property tax relief changes from rebates to tax bill credits. The extent to which reductions occur will be most affected by the proportion of senior citizens that prefer to homestead tax relief through rebates.
Other provisions of the bill provide permissive grants of authority to local officials to pursue changes in funding of employee health benefits that, while intended to result in lower local health benefit costs wherever possible, do not have a direct fiscal impact.
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Section: |
Legislative Budget and Finance Office |
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Analyst: |
Lead Fiscal Analyst Frank Haines Assistant Legislative Budget and Finance Officer |
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Approved: |
David J. Rosen Legislative Budget and Finance Officer |
This fiscal estimate has been prepared pursuant to P.L. 1980, c.67.
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LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 4
STATE OF NEW JERSEY
212th LEGISLATURE
DATED: FEBRUARY 28, 2007
SUMMARY
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Synopsis: |
Implements CORE proposals, including "Uniform Shared Services and Consolidation Act"; user-friendly budgets; revision of county superintendent of schools title and duties. |
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Type of Impact: |
Potential local government cost reduction; potential State expenditure increase. |
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Agencies Affected: |
Department of Education; counties, municipalities, and agencies and instrumentalities thereof; local school districts. |
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Office of Legislative Services Estimate | ||||
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Fiscal Impact |
Year 1 |
Year 2 |
Year 3 |
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State Cost |
Indeterminate Potential Expenditure Increase - See Comments Below |
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Local Savings |
Indeterminate Potential Local Cost Decrease - See Comments Below |
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· The Office of Legislative Services (OLS) estimates that this bill may result in an indeterminate decrease in local costs, by increasing State oversight of local school district budgets, operational and administrative practices, and by reducing existing statutory obstacles to local undertaking of consolidations and joint and shared services.
· The OLS estimates that this bill may result in an indeterminate increase in State costs, by reconfiguring the current office of the county superintendent of schools and expanding the duties and responsibilities of that office.
· The OLS notes that indeterminate increases in State expenditures may result from provisions that require annual State funding of property tax credits to residential property owners and residential tenants in situations where municipal consolidations are voluntarily implemented.
BILL DESCRIPTION
Assembly Bill No. 4 (1R) of 2006 groups together certain components of the CORE proposal that was considered by the Joint Legislative Committee on Consolidation and Shared Services.
Article 1 contains the “Uniform Shared Services and Consolidation Act,” which includes provisions designed to encourage savings among local units of government through the use of shared services, joint meetings, and municipal consolidation; codifies the “Sharing Available Resources Efficiently” (SHARE) program of financial incentives for local units to investigate shared services opportunities and also empowers residents to promote shared service and consolidation opportunities; and provides methods for resolving Civil Service barriers to shared services and consolidation in situations where some participating local units have adopted Civil Service and some have not.
Article 2 of the bill requires preparation by municipalities and counties and other local units of government of “user-friendly” budgets in plain language summary format.
Article 3 reconfigures the office of the county superintendent of schools, by re-naming the position the executive county superintendent of schools, making the position a gubernatorial appointment, with Senate advice and consent, for an initial three-year term, with re-appointment contingent upon a satisfactory performance assessment, and revising the duties of the office. In addition to assuming the current duties of the county superintendent, the executive county superintendent of schools is assigned expanded duties, including: promoting administrative and operational efficiencies and cost savings within school districts; recommending the consolidation of certain districts’ administrative services; eliminating of districts not operating schools, if appropriate; developing a plan to consolidate school districts in the county and require the affected districts to hold a referendum on the plan; promoting the coordination and regionalization of public and nonpublic pupil transportation services, cooperative purchasing of textbooks and other instructional materials; and monitoring the need for and delivery of services to special education students. The article also provides that the executive county superintendent is required to review all school district budgets and may disapprove a portion of the school district’s proposed budget upon determining that the district has not implemented all potential efficiencies in the administrative operations of the district or that the budget includes excessive non-instructional expenses. Under the article, local school district may apply to the executive county superintendent of schools to have services including, but not limited to, transportation, personnel, purchasing, payroll, and accounting assumed by the office of the superintendent.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that the potential impact of the provisions of Article 3 of the bill is to increase State expenditures by indeterminate amounts while decreasing local school district costs by indeterminate amounts. The provisions comprising Article 3, by revising the office of county superintendent of schools, re-naming the office the executive county superintendent of schools, and by significantly expanding the duties of the office, imply a level of staffing and operational costs above those currently provided through State appropriations. The OLS lacks sufficient information about current costs and operational practices of the several county superintendent offices with which to develop an estimate of a level of spending adequate to ensure performance of all current and expanded duties. The effective exercise of these expanded duties by the office of the executive county superintendent will potentially lead to reduced local school district costs, for example through consolidation of administrative services (subsection e. of section 49), elimination of school districts that do not operate schools (subsection g. of section 49), oversight of school district budgets (subsection l. of section 49) and assumption of certain services on behalf of local school districts (section 54).
The OLS additionally estimates that the potential impact of the provisions of Article 1 is to decrease by an indeterminate amount local government costs, as well as to increase State expenditures by an indeterminate amount. Subarticles B and C, by clarifying and establishing procedures and conditions for entering into shared service agreements and joint meetings, respectively, are intended to remove obstacles to those undertakings, and would therefore facilitate future multi-government arrangements that in the past have resulted in cost savings. Subarticle D provides more flexible options to municipalities seeking to study or effect consolidation, and in doing so could lead to municipal consolidation more frequently than under current law. Also, subsection b. of section 28, contained within Subarticle D, provides property tax credits for owners of residential property and residential tenants to negate increases in school and municipal property taxes that result from municipal consolidation, a new and potentially decisive incentive to consolidation. In requiring full annual state reimbursement of the cost of this credit, which endures until the residential property is sold or the tenant moves, this provision could also result in increased annual State expenditures by an indeterminate amount.
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Section: |
Legislative Budget and Finance Office |
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Analyst: |
Frank Haines Assistant Legislative Budget and Finance Officer |
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Approved: |
David J. Rosen Legislative Budget and Finance Officer |
This fiscal estimate has been prepared pursuant to P.L. 1980, c.67.
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Gov News |
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show details |
12:20 pm (10 minutes ago) | |
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NEWS RELEASE Governor Jon S. Corzine April 3, 2007 FOR MORE INFORMATION: Press Office 609-777-2600 GOVERNOR SIGNS LANDMARK PROPERTY TAX REFORM TRENTON - Governor Jon S. Corzine today signed landmark property tax legislation that will lower property taxes in the short-term while instituting long-term reforms to help break the decades-long cycle of steep annual property tax increases. “I am proud to sign into law a remarkable combination of relief and reform that seemed impossible just a few years or even a few months ago,” said Governor Corzine. “Through letters and e-mails, and at town hall meetings and sporting events across our state, I have heard from overburdened homeowners about their sizable and always-increasing property tax bills. Today, we are taking significant steps to ease that burden.” “This year, hardworking homeowners will experience the largest level of relief in state history. The four percent tax levy cap will be instrumental in helping to sustain this relief over time,” said Senate President Richard J. Codey, a prime sponsor of S-20. “Rest assured, the totality of our efforts will produce long-term reform and in the interim taxpayers will get much-needed relief now.” “This is the double-dose of property tax reform and relief taxpayers have asked for and so desperately need,” said Assembly Speaker Joseph J. Roberts, Jr. (D-Camden). “This initiative provides historic levels of property tax savings, cutting property taxes for the overwhelming majority of New Jerseyans and creating a four-percent cap to sustain them.” Bill A-1/S-20 will provide homeowners with immediate and substantial property tax relief. Homeowners with incomes up to $100,000 will receive a 20 percent reduction in their property taxes through either a credit or a rebate. Those with incomes between $100,000 and $150,000 will receive a 15 percent reduction, and those with incomes between $150,000 and $250,000 will receive at 10 percent reduction. The program will provide benefits to 1.9 million homeowners - about 95 percent of all homeowners in the state - and to 800,000 tenants. The overall average benefit for all eligible homeowners will be nearly $1,100. The average for senior homeowners, who are guaranteed to receive a rebate at least equal to last year’s amount, is nearly $1,250. The average benefit for non-senior homeowners is nearly $1,000 and will be more than triple the amount of last year’s benefit. Funding for tenant rebates will be doubled, with low-income tenants receiving a dramatic increase. The legislation also imposes a 4 percent property tax levy cap on school districts and all county and local governments. The cap provisions of the bill permit only a small number of adjustments. To address “extraordinary” increases in costs, the bill creates a limited waiver process for school districts that will require application to and approval by the Commissioner of Education. The school district waiver process will be initiated for the 2008-2009 school year budgets. The Local Finance Board in the Department of Community Affairs will consider county and local government waiver requests. Governor Corzine has directed both agencies to put the interests of taxpayers first in reviewing any waiver requests. Under the new law, school districts and county and local governments are permitted to seek voter approval to exceed the tax levy cap. Any proposal to exceed the cap must be passed by a supermajority of 60 percent of the voters, except for the upcoming school elections where a simple majority of 50 percent will be required to approve a cap override. Bill A-4/S-19 implements several reform proposals that were originally contained in the “CORE reform” package of legislation put forth by Assembly Speaker Roberts last year. This bill includes the “Uniform Shared Services and Consolidation Act,” which is designed to encourage savings among local units of government through the use of shared services, joint meetings, and municipal consolidation. Financial incentives will be made available to municipalities that participate in shared services opportunities under the “Share Available Resources Efficiently” (SHARE) program. The legislation also sets new rules to bring increased openness and transparency to the budgeting process for schools and municipalities. All municipal budgets and municipal employee salary changes are required to be posted online. Budgets posted online must be accompanied by a user friendly plain language guide. Additionally, all compensation, benefits, separation benefits, and contract terms for school superintendents, assistant superintendents, and school business administrators must be clearly disclosed to the Commissioner of Education and will be made available for public review. Finally, the legislation greatly expands the authority and responsibility of county superintendents of schools, who will now be known as executive county superintendents. The executive superintendents will have the authority to disapprove portions of a school district’s budget if a district has not implemented all potential administrative efficiencies or if a budget includes excessive non-instructional expenses. The executive superintendents also will be responsible for developing a plan to eliminate all so-called “non-operating” school districts, which are school districts without schools. Additionally, they will develop a proposal for submission to the voters to create or enlarge regional school districts so that school districts smaller than K-12 would be eliminated. The signing of these bills comes on the heels of other significant reforms recently signed into law by Governor Corzine to control additional drivers of property tax increases. On March 15, the Governor signed the following bills: Ř A-2/S-15 – legislation to create an independent Office of the Comptroller to root out waste, inefficiency and mismanagement in state and local government. The comptroller will have the authority to perform financial audits and performance reviews of all government entities. Ř A-5/S-4 – a bill to increase the fiscal oversight and accountability of school districts Ř A-15/S-12 – a measure creating a commission to study and recommend municipal consolidations and other actions designed to improve efficiency and eliminate duplication Ř S-14/A-20 –- a bill to mandate pension forfeiture and prison sentences for public officials or employees convicted of corruption The Governor also has secured commitments from legislative leaders that they will pass a bill to ban dual office holding before he signs the FY08 budget. “When we began the Property Tax Special Session last summer, we knew that success would be measured on two things – how much direct relief we could immediately get to homeowners and how effectively we could control spending," said Senate Majority Leader Bernard F. Kenny, Jr., (D-Hudson). "Today, we are providing New Jersey residents with a staggering amount of property tax relief – not only in terms of dollars but also in terms of families reached.” “Property taxes are issue number one, two, and three for the residents of this state,” said Assemblyman John F. McKeon (D-Essex). “After years of out-of-control property tax increases and fluctuating relief, this combination of tax cuts and caps is just what the doctor ordered to help homeowners, renters, and senior citizens.” “This historic infusion of property tax savings will benefit millions of homeowners and renters,” said John J. Burzichelli (D-Gloucester). “These credits, rebates, and caps will put the brakes on runaway property taxes and give residents the real relief they deserve.” Assembly Bill No. 1 was sponsored by Speaker Joseph J. Roberts, Jr. (D-Camden, Gloucester) and Assemblypersons John F. McKeon (D-Essex) and John J. Burzichelli (D-Salem, Cumberland, Gloucester). It was sponsored in the Senate by Senate President Richard J. Codey (D-Essex) and Senator Bernard F. Kenny, Jr. (D-Hudson). Assembly Bill No. 4 was sponsored by Speaker Joseph J. Roberts, Jr. (D-Camden, Gloucester) and Assemblypersons John S. Wisniewski (D-Middlesex), Jerry Green (D-Middlesex, Somerset, Union), Robert M. Gordon (D-Bergen), Louis D. Greenwald (D-Camden), Pamela R. Lampitt (D-Camden), Bonnie Watson Coleman (D-Mercer), Douglas H. Fisher (D-Salem/ Cumberland/ Gloucester), and Nilsa Cruz-Perez (D-Camden/Gloucester). It was sponsored in the Senate by Senator Bob Smith (D-Middlesex, Somerset). ### Delivering Results -- Property Tax Relief and Reform The Special Session on Property Taxes that Governor Corzine opened last summer has produced the most comprehensive set of measures ever enacted in New Jersey to provide immediate relief from high property taxes and to create structural reforms that will help break the decades-long cycle of steep annual property tax increases in New Jersey. Immediate Relief
Long-Term Reform Promoting Consolidation and Shared Services
Improving Ethics, Fiscal Oversight and Accountability
Controlling Spending
Reducing Reliance on Property Taxes
Photos and audio and video clips from Governor Corzine's public events are available in the Governor's Newsroom section on the State of New Jersey web page, http://www.nj.gov/governor/news/ | ||||
