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GSCS Take: Too Much, Too Soon, So Little Time...
‘NJ Democrats, Gov. Chris Christie each have good ideas, but can they work together?’ By Star-Ledger Editorial Board "...The cap on property taxes is its core. Like a similar cap in Massachusetts, this one could be waived if local voters approve."
‘N.J. Democrats, Gov. Christie propose dueling tax plans’
By Statehouse Bureau Staff Record, Star Ledger
‘NJ Democrats, Gov. Chris Christie each have good ideas, but can they work together?’ By Star-Ledger Editorial Board May 11, 2010, 5:45AM
At 11:30 yesterday morning, Democrats offered a plan to restore the tax surcharge on incomes over $1 million, a move that could ease the budget crunch on the remaining 99.5 percent of the state’s population. That’s a good idea, one that could help us navigate this year’s crisis.
A half hour later, the Republican governor outlined a muscular plan to cap property tax increases at 2.5 percent a year, and to impose similar limits on the salaries and benefits of public employees. That’s an even better idea, one that offers a lasting cure to New Jersey’s addiction to ever-increasing government spending.
More opinion coverage:
• Columnist Tom Moran: Gov. Chris Christie's 'confrontational tone' may cause him to lose needed partners among N.J. Democrats
• Columnist Paul Mulshine: Property-tax cap isn't that slick of an idea
Let’s look first at the Democrats’ plan. Know at the outset that this has almost no chance becoming law. The surtax on the wealthy expired in December, and the governor sees any attempt to extend it as a tax increase. He’s taken a blood vow to veto that.
So Democrats are going through this exercise to point to the basic fraud behind Gov. Chris Christie’s budget plan: He talks about shared sacrifice and he doesn’t deliver it. He would cut taxes for the wealthy even as he reduces tax credits for the working poor and closes out thousands of families from state health programs. That is not shared sacrifice — it is class warfare waged against the state’s most vulnerable.
But Democrats veered off course yesterday by saying that all the money raised through the surtax would go to senior citizens’ property tax rebates and subsidized drug purchases. Nothing for children, nothing for working poor families, nothing for health care or universities or libraries.
The obvious reason is politics.
The elderly vote, and Democrats are pandering to them. While most of this help goes to needy seniors, some of it does not. Property tax rebates go to seniors earning up to $150,000. How can Democrats pose as populists while they send checks to seniors who are in such a comfortable income range? What happened to the concern for working poor families Democrats have been talking about for months?
Christie’s plan is more serious and far-reaching. The cap on property taxes is its core. Like a similar cap in Massachusetts, this one could be waived if local voters approve.
Some are concerned that poor towns would be less likely to override the cap, so this could aggravate the split between rich and poor towns. Others note that a cap could hurt New Jersey more because we are cutting state aid at the same time, while Massachusetts increased aid to soften the impact.
Those are concerns the Legislature should examine carefully. But as the governor pointed out yesterday, Massachusetts has one of the best public school systems in the nation. The cap has not been ruinous.
The governor also proposes a range of useful tools to let local officials contain salaries and benefits. The most important is a cap on arbitration awards that would limit the growth in employee costs to 2.5 percent, including salaries and benefits. A flexible cap that makes provisions for inflation and increases in health costs seems more sensible, but he’s headed in the right direction.
New Jersey has the nation’s highest paid police officers and firefighters, and the teachers are close. Even during this recession, they have been receiving generous raises and largely protecting their cushy benefit packages. A cap would give taxpayers a fighting chance to reverse this unsustainable cost spiral.
It seems to us that Democrats are right about the surtax, and Christie is right about the need to cap taxes and employee costs. But yesterday they had nothing but criticism for each other. Too bad we can’t put them all in time-out until they see the wisdom in each others’ approach.
‘N.J. Democrats, Gov. Christie propose dueling tax plans’
By Statehouse Bureau Staff May 11 2010
TRENTON -- New Jersey’s political divide grew wider today as Republican Gov. Chris Christie advanced sweeping plans to slow the growth of property taxes while Democrats proposed raising income taxes on the state’s wealthiest residents to pay for senior programs.
The dueling proposals — and sharp-edged rhetoric in back-to-back news conferences — showed the governor and Democratic lawmakers drifting apart with less than two months to go before the state budget deadline. Neither the budget nor Christie’s reforms can move forward without bipartisan support.
Also digging in for battle today were powerful public worker unions representing police, firefighters and teachers, whose salaries and benefits would be constrained under Christie’s plans to force local governments to control costs.
"This is our Armageddon," said Bill Lavin, the president of the Fireman’s Mutual Benevolent Association. "In a good economy, or a bad economy, we’re still a nation and state of laws, and a contract is a contract."
More coverage:
• Gov. Chris Christie proposes 2.5 percent annual property tax cap in 33-bill package
• N.J. Democrats propose tax hike on those making more than $1M
• N.J. Democrats, Gov. Chris Christie are slated to make budget announcements
• N.J. lawmakers work to fix $1.7B unemployment fund deficit, avert 52 percent tax hike for businesses
• N.J. unemployment fund will not be bailed out by federal money, Menendez says
• N.J. Gov. Christie proposes cuts to unemployment benefits to lessen business tax hike
• Gov. Chris Christie warns N.J. companies of tax hike to cover unemployment fund
• Complete coverage of the 2010 New Jersey State Budget
Christie stressed his plan would keep property tax increases below 2.5 percent unless voters allow more in a referendum.
"It gives the ultimate trump card to the voters," he said.
Faced with Christie’s $29.3 billion budget plan that would cut many popular programs, top Democrats today said they could spare senior citizens and disabled residents by imposing a one-year income tax hike on those earning at least $1 million.
They said raising the tax on about 16,000 people would allow lawmakers to restore property tax rebates for more than 600,000 senior homeowners and tenants, and block Christie’s plan to increase co-payments and charge a new $310 deductible to 105,000 senior and disabled citizens under the Pharmaceutical Assistance to the Aged and Disabled program, known as PAAD. "The governor’s refusal to agree to reinstate the millionaire’s tax will guarantee that ... thousands of seniors and the disabled will edge over into poverty," said Senate Majority Leader Barbara Buono (D-Middlesex). "That is perverse logic."
Christie immediately rejected the Democrats’ proposal, accusing them of trying to "pander" to senior citizens with a one-year fix that would harm the state’s broader economy. He repeated his vow to veto any tax increase, and characterized the dispute as a "philosophical difference."
"The difference is the Democrats in the leadership of the Legislature want higher taxes, more spending and a temporary Band-Aid approach to property tax relief," Christie said. "The moment has arrived for us to have a property tax system that can be controlled, that can be sustainable, and that can work for the people who are paying the bills."
Top Democrats did not sign on to his 33-bill package, anchored by a constitutional amendment that would limit annual property tax hikes to 2.5 percent, except when local voters decide to override it. Contract awards for public workers like police, firefighters and teachers — including salaries, health benefits, vacation time and other perks — also could not increase by more than 2.5 percent a year. Christie also wants to allow towns to opt out of civil service rules and place a $15,000 cap on unused sick leave payouts for current workers.
The constitutional limit, modeled after a similar property tax system in Massachusetts, would replace the current 4 percent cap law that Christie says has too many exceptions but Democrats say is working. In 2009, the average residential property tax bill was $7,281 — but the 3.3 percent average increase was the smallest in a decade.
Union leaders said Christie’s reforms would undermine employee rights and similar moves in other states led to fewer police officers, firefighters and teachers as well as a greater disparity between wealthy and poor towns.
Christie said politicians have not controlled property taxes and voters deserve a chance. "I am putting my trust and my faith and my confidence in local rule here in New Jersey," he said.
By Claire Heininger and Lisa Fleisher
Staff writer Rohan Mascarenhas contributed to this report.
