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Statehouse Bureau ‘N.J. lawmakers continue to shore up budget support, quickly pass alternative property tax cap’
Associated Press ‘Property tax cap, women's health bills advance’
Trenton Times editorial ‘Think hard about 'hard cap’
Njspotlight.com ‘School Vouchers Go and Stop in Trenton’ Statement from bill S29 Sweeney/A3065 McKeon-Barnes: S29/Sweeney STATEMENT (Identical bill A3065 McKeon-Barnes) "This bill reduces the tax levy cap for school districts, counties, municipalities, fire districts, and solid waste collection districts from the currently permitted 4% annual increase to a 2.9% permitted annual increase. The bill also establishes the tax levy cap as the permanent mechanism for the calculation of the maximum allowable increase in property taxes that may occur between budget years. Under existing law, the 2007 tax levy cap law is scheduled to expire June 30, 2012. The bill narrows the purposes for which waivers to authorize the raising of additional tax levy may be requested from the Local Finance Board to only those purposes related to the provision of government services that the board deems essential to protect the public health, safety, or welfare. In the case of school districts, a waiver may only be requested from the Commissioner of Education for a district’s failure to meet the core curriculum content standards (thorough and efficient). The bill also eliminates the ability of a local unit or a school district to submit a public question to the voters to exceed the allowable tax levy. The bill would also permit levy cap "banking" of any portion of the permitted 2.9% increase under the property tax levy cap that is not used by a county or municipality in any budget year. In the case of a school district it would allow cap banking of any portion of the permitted 2.9% increase plus applicable adjustments not used by the school district in a budget year. Under current law, if a county, municipality, or school district does not use the entire 4% increase, perhaps because it uses surplus that year to keep tax rates steady, the difference is lost. This can be a problem in a succeeding tax year if circumstances require an unexpected increase in expenditures to maintain services. Under the bill, the cap is being reduced, but any unused permissible increase amount under the reduced levy cap limit could be used in any one of the next three succeeding budget years. This concept is similar to cap banking under the municipal and county appropriations cap law (N.J.S.A.40A:4-45.1 et seq.). Cap banking was also authorized under the statutes which established the formula for the calculation of a school district’s spending growth limitation, which was last operative in the 2006-2007 school year, and which is being repealed under this bill as the tax levy growth limitation becomes the permanent mechanism to calculate school district tax levy increases. The bill also deletes language in current law in order to eliminate a levy cap penalty that occurs when a county or municipality acts responsibly to reduce its debt servicing expenditures. The reduction in the property tax levy cap would be applicable to the local budget year next following enactment of the bill, and the opportunity to bank any unused portion of the allowable increase would commence in that local budget year so that any unused portion of the current 4 percent levy cap would not be available to be banked. The current levy cap, enacted in 2007, has been effective in holding down the rate of property tax increases. According to the information posted on the Division of Local Government Services website, the average municipal property tax bill rose 3.7% from 2007 to 2008 and 3.3% from 2008 to 2009. The tightening of the existing levy cap laws will act to further control such increases."
Statehouse Bureau ‘N.J. lawmakers continue to shore up budget support, quickly pass alternative property tax cap’
Published: Friday, June 25, 2010
Statehouse Bureau Staff
TRENTON — New Jersey’s divided state government struggled closer to finalizing a budget Thursday, while a controversial plan to tighten the cap on annual property tax increases sailed through its first hearing.
As minority Republicans battled to keep votes lined up for GOP Gov. Chris Christie’s first budget, Democrats on the Senate budget committee gave quick approval to a 2.9 percent limit on property tax hikes, down from the current 4 percent. The plan, spearheaded by Senate President Stephen Sweeney (D-Gloucester), is a direct challenge to Christie’s own initiative for a constitutional cap at 2.5 percent.
"It’s a great sound byte," Sweeney said of Christie’s plan, but "a constitutional amendment would do nothing but harm New Jersey."
Republicans attempted to amend the bill to make it more resemble Christie’s cap, including removing exceptions for expenses like health care that the governor calls "Swiss cheese holes" that render it ineffective.
"It’s not enough. It will never be enough unless we put constitutional constraints on it," said Sen. Joseph Pennachio (R-Morris).
But the Republican changes were defeated, setting up a vote by the full Senate on Monday. The Assembly Budget Committee is expected to take up the cap bill (S-29) today.
The governor has declined to say whether he would sign Sweeney’s legislation, instead pressing lawmakers to allow a vote on his plan. But Sweeney Thursday said it may not get a hearing until over the summer. Christie’s plan faces a July 7 deadline to clear committees so it could be put on the November ballot.
More coverage:
• N.J. Assembly budget committee narrowly approves $29.4B budget
• Sweeney's 2.9 percent property tax cap plan is approved by N.J. senate committee
• Tempers flare as N.J. Assembly panel passes budget bills
• Republican Senate leaders push ahead with votes on $29.4B N.J. budget deal
• N.J. legislators scramble to ensure budget deal support
• Gov. Chris Christie's $29.4B budget proceeds to full Senate vote
Though it passed the main budget bill Wednesday, the Senate budget committee on Thursday continued to negotiate as it approved several related bills needed to implement the governor’s $29.4 billion budget.
With the budget compromise dependent on unanimous Republican support, Kean and Christie said they were confident the party would be unified in time for Monday’s final vote ahead of its July 1 deadline.
"Despite misgivings — and everyone has misgivings about one portion or another of this budget — I’ll have the Republican support I need to pass this budget," Christie said in a radio interview.
Sweeney, though, said Democrats wouldn’t budge off their pledge to provide the minimum number of votes. "This isn’t my problem, this is their problem," he said.
There was less confusion but still theatrics in the Assembly, where the budget committee Thursday approved the budget and several bills tied to it.
The committee voted 5-4, with Assemblyman Albert Coutinho (D-Essex) casting the lone Democratic vote that tipped the balance. "I’m going to extend my hand in bipartisanship so we can move this budget forward," said Coutinho, who added that voting for it is "not the best political move" considering his urban, heavily Democratic district.
Three Democrats who normally sit on the committee did not show up. The five who did attend traded off on being the only yes vote on the budget and its related bills.
Democrats tried to make Republicans take full responsibility for Christie’s cuts, and challenged them on the governor’s claim that he closed a $10.7 billion budget gap without any tax increases. In an interview, Assembly Budget Chairman Louis Greenwald (D-Camden) ticked off a list of items he said would raise taxes, such as removing a tax cap on hospital revenues, the 75 percent reduction in property tax rebates and the elimination of the $45 million earned income tax credit.
"You want to call them a loss of benefit, a fee increase? Call them what you want," Greenwald said. "When it’s money out of people’s pockets, it’s a tax increase."
But when Democrats brought that up during the hearing, it drew an angry response from Assemblyman Jay Webber (R-Morris), who accused them of "getting on their soapboxes."
"Yours is the party that destroyed the economy in this state, ruined the budget," said Webber, also the GOP state chairman. "And today you’re going to enjoy focusing on the trees instead of the forest."
By Claire Heininger and Matt Friedman/Statehouse Bureau
Lisa Fleisher and Josh Margolin contributed to this report.
Trenton Times editorial ‘Think hard about 'hard cap’
Friday, June 25, 2010
STAFF WRITER
Gov. Christie's proposed "hard cap" on annual increases in municipal, school and county property tax levies is certainly necessary. The current cap of 4 percent has been far too easily circumvented through waivers because of "hardships" that many times are nothing more than habitual spending.
He has characterized the constitutional cap as one of the tools in a kit of almost three dozen new laws to make it easier for local officials to hold down costs to stay under the 2.5 percent limit.
At a recent meeting of his Council on Economic Advisers, Gov. Chris Christie referred to his plan as a comprehensive and permanent means of easing the burden on New Jersey residents.
He said he realizes it is not a perfect solution, adding, "There is no perfect solution to this problem."
He's right, of course. There is no ideal way to restrain the staggering property tax bills that cost New Jersey residents an average of $7,300. But that doesn't mean the solution provided by the governor cannot be improved.
We believe legislative leaders Sen. Stephen Sweeney and Assemblywoman Sheila Oliver have provided an improvement with a proposal for a 2.9 percent cap that would be established by law rather than a constitutional amendment. It's a more flexible approach than the ironclad version offered by the governor, which says the cap could be lifted only for debt payments or if 60 percent of the voters of the jurisdiction gave their approval in a referendum.
That only such a supermajority and not a simple majority of voters could influence spending in their communities is a troubling aspect of the governor's plan.
Senate President Sweeney has also argued that the 2.9 percent cap would more closely reflect the actual rate of inflation, "so towns can budget based on realistic cost increases." Without built-in flexibility, costs stemming from health-care premiums and inflation could devastate a municipality's budget, forcing debilitating cuts in other areas.
Gov. Christie is modeling his plan on a property tax cap adopted in Massachusetts 30 years ago. The Massachusetts cap law is credited with keeping property taxes down relative to home values, but it has been criticized for polarizing communities and expanding the gap between the towns that can and cannot afford to vote for higher property taxes.
And now that state aid to municipalities has diminished because of the rocky economy, fissures are beginning to show in Massachusetts. Residents complain of ragged roads and diminished services.
"A hard cap would just destroy local governments and make it impossible to provide public safety, which then the state will be forced to fund," Sen. Sweeney said. "This is a very attainable goal without going to the constitution, where if we make a mistake, we can never correct the problem."
It's an argument the governor should consider.
Associated Press ‘Property tax cap, women's health bills advance’
TRENTON — A Senate budget committee has advanced a bill capping local property tax increases at 2.9 percent.
The legislation would replace a 4 percent cap.
Gov. Chris Christie had proposed a 2.5 percent cap that would be written into the Constitution.
Related
· Assembly panel OKs NJ's $29.4B budget
· GOP opposition stalls key NJ budget votes
· NJ Senate committee passes budget bill
· NJ Dems push to restore family planning money
· Items restored under NJ budget compromise
· Newark Mayor endorses NJ governor's tax cap plan
· GOP calls on Dems to post gov's tax cap plan
· NJ Dems want to pin bad news budget on GOP
· Christie's N.J. Budget: Its impact on jobs, schools, taxes and towns
Budget committees in both houses of the Legislature also advanced a bill allocating $7.5 million for family planning centers.
Sen. Loretta Weinberg, a Democrat sponsoring the bill, amended it to clarify that none of the money would be used for abortions.
Christie's $29.4 billion budget proposed eliminating funding for women's health centers.
Meanwhile, Senate Republicans hit a snag over other budget-related legislation. One senator, Michael Doherty, opposes four bills that raise taxes or fees.
Njspotlight.com ‘School Vouchers Go and Stop in Trenton’
Opportunity Scholarship Act debated in Senate, even if it can't make the agenda
By John Mooney, June 25 in Education
Fans and critics of private school vouchers made a day of it at the Statehouse yesterday, as the prospects for the long-debated idea coming to New Jersey rose and fell as the day passed.
Related Links
And in the end, when the committee rooms emptied by early evening, not much changed—leaving neither side quite satisfied.
The proposal comes out of a bill co-sponsored by Sens. Raymond Lesniak (D-Union) and Thomas Kean Jr. (R-Union), which was expected to get an airing before the Senate budget committee yesterday. It actually was never on the agenda, but you wouldn’t know it by all the talk and high-profile guests who showed up just in case.
Equal Representation
Gov. Chris Christie’s policy staff was well represented on the support side, as was the top brass of the New Jersey Education Association in the opposition. So was the head of the Education Law Center, the Newark advocacy group that has led the Abbott v. Burke school equity litigation and sees the voucher bill as the next battleground.
“We don’t want to see it get out of here,” said David Sciarra, the ELC’s executive director. “We don’t want it to get any momentum. Who knows what would happen if it got out of committee."
Supporters of the Opportunity Scholarship Act proposal have pressed for the Senate budget panel to consider the bill in the waning days of the Legislature’s session. It would open the way for a Senate vote early next week, and although the Assembly remains a big question mark, the idea of school vouchers in New Jersey would have moved further than its ever been after more than a decade of debate.
Scholarships for Low-Income Students
Under its proposed form, the bill would provide $6,000 to $9,000 scholarships to 20,000 low-income students in more than 170 low-performing schools to put toward schools of their choice, public or private. The scholarships would be funded through corporate contributions entitled to one-to-one tax credits.
The measure has passed one committee in the Senate, and Christie has demanded that it be on his desk before the Legislature goes home for summer. Lesniak, the primary driving force, has for the last several days worked both sides of the aisle to try to win the votes.
But Kean this week openly questioned some of his co-sponsor’s negotiations, and yesterday he confronted Lesniak in a Senate quorum. He afterward downplayed any trouble and said the two had come to “mutual agreement” on not diluting the bill. Lesniak chalked the moment to “my Polish emotions coming out.”
Dueling Press Conferences
