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Statehouse Bureau 'Gov. Christie, Senate leaders announce 2 percent property tax cap compromise'
Politickernj.com ‘Deal reached between senate and governor’ and ‘Sources: Cap Deal Done. Oliver not yet on board’
Nj.com ‘Tension between Gov. Christie, N.J. Dems marks path to budget passage, property tax deal’
‘Gov. Christie, Senate leaders announce 2 percent property tax cap compromise’
Politickernj.com ‘Deal reached between senate and governor’ and ‘Sources: Cap Deal Done. Oliver not yet on board’
Nj.com ‘Tension between Gov. Christie, N.J. Dems marks path to budget passage, property tax deal’
‘Gov. Christie, Senate leaders announce 2 percent property tax cap compromise’
Published: Saturday, July 03, 2010, 5:49 PM Updated: Saturday, July 03, 2010, 9:48 PM
TRENTON — Gov. Chris Christie and top legislators unveiled this afternoon a new proposal to cut in half New Jersey's current property tax cap.
The agreement represents a series of compromises from both parties. It would limit property tax increases to 2 percent a year, lower than the current 4 percent cap and lower than previous proposals from Christie and Senate President Stephen Sweeney (D-Gloucester).
It would also decrease the number of expenses exempted from the cap, from 14 to four. Those four exemptions are pension benefits, health benefits, capital expenditures and certain emergencies. An exemption for spikes in school enrollment will remain in place.
A key feature of the proposal is allowing local residents to vote on whether to increase taxes higher than the cap allows. Currently this is handled by a local finance board, but if the proposal is adopted, the only way the cap could be exceeded would be with the approval by a majority of local residents.
"This reaches all the core principles everyone has been talking about," Christie said.
Standing with Christie today at the press conference in the governor's outer office were Lieutenant Governor Kim Guadagno, Senate Minority Leader Thomas Kean (R-Union), Assembly Minority Leader Alex DeCroce (R-Morris) and Sweeney.
"They said it couldn't be done," Sweeney said. "Well, we proved them wrong, governor."
Notably absent was Assembly Speaker Sheila Oliver (D-Essex), whose support remains in doubt.
"The speaker has not been part of any closed door deal," spokesman Tom Hester said in a statement. "As the speaker has said repeatedly, we will thoroughly vet any proposal."
Still, Christie remained confident about the plan's prospects in the Legislature.
"They're going to be clamoring to vote for this," he said. "Part of what this is all about is putting aside ego and getting stuff done."
The proposal will take the form of a conditional veto. That means Christie will modify the Democrats' 2.9 percent cap bill already approved and send it back to the Legislature for reconsideration on Tuesday. Senate President Stephen Sweeney (D-Gloucester) pledged to advance the legislation on Thursday.
If the Senate approves the legislation, it will be sent to the Assembly for a vote. If it passes there, the governor then has to sign it into law.
The proposal unveiled today is the result of three days of high-level Statehouse wrangling during a special joint legislative session called by the governor to force a showdown over property tax reform.
Democrats and Republicans have previously been at odds over the structure of property tax limits. After Christie on Thursday said he would accept a statutory limit on local property tax increases -- by law rather than by constitutional amendment -- the sticking points remained the exemptions to the cap.
Sweeney has said it does not make sense to include costs beyond a town's control -- such as energy costs and health care -- while Christie described those type of exceptions as the holes in a "swiss cheese" policy. Sweeney previously questioned why the percent increase was not lower than 2.5.
Essex County Executive Joseph DiVincenzo, a key supporter and close adviser to Oliver, said he had been on the phone with her, Christie and Sweeney pushing for the deal. The non-constitutional cap, along with other reforms, would help local governments trying to keep property tax increases down, he said.
He said he expects all the pieces to come together quickly.
"All we need now is just to see a press conference with the three of them standing there," he said, referring to Oliver, Christie and Sweeney. "This is a great deal for New Jersey. I'm totally supportive of it. There's no question I support this deal. I've been telling them that. It's got to get done."
By Lisa Fleisher, Chris Megerian and Josh Margolin/Statehouse Bureau
More coverage:
• N.J. Assembly Speaker has not agreed to Christie, Senate 2 percent property tax cap deal
• Gov. Chris Christie, N.J. Senate leaders reach deal on 2 percent property tax cap
• After day of impromptu meetings in Trenton, fate of proposed property tax cap remains unclear
• N.J. Assembly panel requests more time, testimony to consider Gov. Christie's tax cap
• Special N.J. legislative session kicks off property tax cap showdown
• Gov. Chris Christie's prepared speech to the Legislature
Politickernj.com ‘Deal reached between senate and governor’
By Darryl R. Isherwood | July 3rd, 2010 - 4:21pm
Gov. Chris Christie and senate Democrats have reached an agreement on a property tax cap bill, but Assembly Speaker Sheila Oliver has reportedly not yet signed on.
Democratic sources said Oliver wanted to vet the deal with her caucus before agreeing.
The agreement, announced by the governor in a press conference Saturday, calls for a 2 percent cap on property tax increases, but carves out exceptions for healthcare costs, pension costs, debt service and capital expenditures and emergency allocations. Voter approval of 50 percent plus one vote would be required to exceed the cap.
In a flurry of press releases Republican lawmakers crowed about the agreement, calling it a victory for the governor and for the taxpayers.
“The agreement announced by the governor finally puts New Jersey on the road that will return fiscal sanity to our state," said Assembly Minority Leader Alex DeCroce. "Voters will now have a say on how their tax dollars are spent, instead of Trenton politicians. This is a key component in our effort to cap government spending."
The full legislature will reportedly vote on the bill Thursday.
On Tuesday, Christie will issue a conditional veto on the cap bill passed by both houses of the legislature last week. That bill imposes a 2.9 percent property tax increase cap with simlar exceptions.
Senate President Steve Sweeney, (D-West Deptford), who sponsored that bill in his house, also said he was happy with the agreement and called Saturday a momentous day in the state's history of soaring property taxes.
“Hopefully today will go down as the day when New Jersey was finally able to declare independence from its onerous and broken property tax system,” said Sweeney. “This debate has never been about whether or not New Jersey needs a property tax cap – it does – but how best to enact a cap that will protect both taxpayers and our quality of life. I applaud the Governor for not only pushing this issue, but for being willing to work towards a compromise.”
Though Oliver reportedly has not yet signed onto the bill, Assembly Budget Committee Chairman Lou Greenwald (D-Vorhees) said the agreement is moving in the right direction, but still needs to be fine tuned.
"The concessions are a byproduct of our hard work," said Greewald. "We have been endorsing the 2.0 cap and a number of these exemptions for a couple of weeks. They are absolutely moving in the right direction."
Greenwald said while Christies was eager to take credit for the compromise, the concessions were actually a result of hard work on the part of the Democrats and the legislature.
Politickernj.com ‘Sources: Cap Deal Done. Oliver not yet on board’
By Darryl R. Isherwood | July 3rd, 2010 - 1:52pm
Conflicting reports emerged from Trenton Saturday as the governor and the Democratic controlled legislature battled over tax reform.
Republican and Democratic sources say a deal between the governor and the and the senate to impose a cap on property tax increases is complete.
According to sources the deal would impose a statutory cap of 2 percent, but would exempt debt service, healthcare, capital improvements and emergency allocations. The deal is set to be announced by the governor and the legislative leaders at 2 p.m, sources said.
The deal was first reported by The Star Ledger.
But while a deal between Christie and the senate appears to be complete Assembly Democrats Spokesman Tom Hester Jr. said Speaker Sheila Oilver was not yet on board.
“The Speaker has not been part of any closed door deal," Hester said in a statement. "As the Speaker has said repeatedly, we will thoroughly vet any proposal. The Assembly Budget Committee will meet on Wednesday to consider proposed legislation that represents the Assembly plan.”
Democratic sources called the cap a really good deal for everyone and said for the first time the governor had truly compromised.
"I think there is enough here for everyone for to feel confident," said a source with knowledge of the deal.
Nj.com ‘Tension between Gov. Christie, N.J. Dems marks path to budget passage, property tax deal’
Sunday, July 04, 2010, 7:23 AM Updated: Sunday, July 04, 2010, 7:24 AM
Claire Heininger/Statehouse Bureau
TRENTON — Senate President Stephen Sweeney, the burly labor leader who is the Legislature’s top Democrat, strode into Republican Gov. Chris Christie’s office to hand-deliver two bills to the rookie Republican. With cameras rolling, Christie pulled out his pen and vetoed the measures, which would have increased taxes on millionaires and used the money to pay for property tax rebates for seniors and the disabled.
Sweeney vowed he would not give up the cause: "We’ll be back, governor." Christie smiled and promised to stand firm.
But behind the scenes that May night, the fight was already over. Christie would keep Republicans unified against the tax, and Sweeney could not force it into the budget.
Christie had won the first major battle of his administration, leaving political opponents who control the Legislature with little ammunition to wage war against his austere budget. They would accept his terms — and his way of doing business.
"Someone said to me, ‘He killed you,’ " Sweeney (D-Gloucester) later said in an interview. "I said, ‘No, he didn’t kill me. I was in a situation before we started that I couldn’t win, and I made the best of it.’ "
The journey to the $29.4 billion budget Christie signed last week — and the intersecting drama over property taxes that continued Saturday — was a coming-of-age for Trenton’s new crop of leaders, Republican and Democrat, as they navigated a fiscal crisis and avoided a government shutdown.
Interviews with more than two dozen participants involved in the budget reveal a process peppered by rookie mistakes, unexpected twists and blunt talk in the Statehouse’s first year of fully divided government since Jim Florio was governor.
At one point, with victory in sight, the governor and his allies in the Legislature nearly lost their edge when key senators unexpectedly balked. One Republican lawmaker now concedes he considered quitting rather than voting for Christie’s budget.
More coverage:
• Gov. Christie, Senate leaders announce 2 percent property tax cap compromise
• N.J. Assembly Speaker has not agreed to Christie, Senate 2 percent property tax cap deal
• Gov. Chris Christie, N.J. Senate leaders reach deal on 2 percent property tax cap
• After day of impromptu meetings in Trenton, fate of proposed property tax cap remains unclear
• N.J. Assembly panel requests more time, testimony to consider Gov. Christie's tax cap
• Special N.J. legislative session kicks off property tax cap showdown
• Gov. Chris Christie's prepared speech to the Legislature
• N.J. Gov. Chris Christie swiftly vetoes 'millionaires tax,' property tax rebate bills
• Gov. Christie to tell N.J. lawmakers job is 'only half done' at special joint session of Legislature
• N.J. Assembly passes Christie's $29.4B budget; plan awaits governor's signature
• N.J. GOP Assemblyman remains undecided about Gov. Chris Christie's proposed budget
At another point, Christie showed political agility that surprised his own staff by using his enemies in the teachers union as a foil to divert attention from school funding cuts.
Sweeney, stressing compromise within his own party, was impressed by Christie’s ability to make quick decisions and understand the wide-ranging powers of the New Jersey governorship. But Sweeney said he used what he learned from the budget talks to hang tough in the battle with Christie on how to cap property taxes.
Some officials interviewed for this story requested anonymity when discussing sensitive matters. They agreed it was a critical test for a new Republican governor elected in a solidly Democratic state.
"We have never seen the likes of Chris Christie before," said Sen. Kevin O’Toole (R-Essex). "Everyone acknowledges we made mistakes. (But) the training wheels are off."
QUICK TO DECIDE
Christie ran for governor on a broad promise to stop the runaway spending of state government, but refused to give specifics. An attorney and former federal prosecutor, he lacked the number-crunching expertise of his predecessor, Democrat Jon Corzine, the former Goldman Sachs CEO.
What Christie knew how to do was decide.
Three times a week in the days leading up to the March 16 budget address, his senior team gathered in the office of Treasurer Andrew Sidamon-Eristoff, a veteran New York City budget official and a Trenton newbie. Like career prosecutors laying out evidence, they presented budget items line by line.
"I found the budgeting thing to have been most analogous to the way I operated as U.S. attorney," Christie said in an interview. "The same way in the Treasurer’s Office, they would lay out ‘here’s the thing, here’s the opposition you’ll hear, here’s the people who will be affected, here’s how many people will be affected.’ At the end, they’d say to me, ‘What do you want to do?’ "
When his advisers squabbled or belabored an issue, Christie had a simple signal: "Move on." Once, when that didn’t work, he said louder: "Adios."
The result: a tough spending plan that sought to close a huge deficit with unprecedented aid cuts to schools, the end of rebates and calls to stem spending at all levels of government.
DEALS AND SURPRISES
Sweeney had captured the Senate presidency by ousting Sen. Richard Codey (D-Essex), a wily Statehouse veteran who gained fame as the accidental governor replacing Jim McGreevey. To balance a South Jersey Democrat leading the Senate, a deal was cut to make Sheila Oliver (D-Essex) the Assembly speaker.
"It was felt and anticipated that I would simply walk lockstep with the Senate president," Oliver said in an interview. But it quickly became apparent that was not the case. Oliver staked out a decidedly more deliberate pace than Sweeney and refused to automatically go along.
An ironworkers union leader on hostile terms with New Jersey’s public sector unions, Sweeney initially found much more common ground with Christie — too much, complained some Democrats. But on the issue of taxing the rich to boost a cash-strapped budget — specifically, reinstating a just-expired income tax surcharge on people making more than $400,000 — they were worlds apart.
In their frequent private conversations, Christie kept saying he wouldn’t budge. And Sweeney would just laugh.
"I just didn’t think anyone in their right mind would do something like that," Sweeney said later, still adamant that it was bad policy and bad politics. "It was wrong."
Frustrated by Christie’s rhetoric that the tax would hurt small business owners along with the wealthy, Democrats devised what they thought was a compromise — tax true millionaires, and use the money for senior and disabled taxpayers who needed it most. Christie, who never intended to sign any such tax, was angered more by the timing of the Democrats’ announcement: a half hour before he officially rolled out his "Cap 2.5" property tax reform agenda that opened up a second front in his war with lawmakers. He wasn’t happy with Sweeney springing it on him, and in private Christie made sure he knew it.
DROPPING A BOMBSHELL
As the millionaires tax debate simmered, Democrats held hearings to highlight the impact of Christie’s far-reaching cuts to education, social programs, even services for the blind. But attention fixated on a different spectacle: the governor’s nasty and colorful fight with the New Jersey Education Association, the powerful teachers union that became Christie’s favorite target.
The union and its allies marched on Trenton in record numbers on May 22 to show their anger at Christie, who called on teachers to freeze their pay. But with most Democrats staying far away, it had little impact on the budget.
What mattered more happened on April 12. Just before a planned meeting with NJEA president Barbara Keshishian, Christie was asked at an unrelated press conference how residents should treat any school budget without a teacher wage freeze. He urged them to vote it down.
It was an off-the-cuff statement that blindsided his staff. Behind him, Lt. Gov. Kim
At the Statehouse, Christie chief of staff Rich Bagger was waiting at the vast wooden conference table in Christie’s inner office. He reminded his boss that school budgets typically pass overwhelmingly, and Christie would now have to go out and make the counterargument. The governor did.
When voters rejected a record 58 percent of school budgets, Christie claimed a mandate for his cost-cutting agenda. Democrats who suspect the comment wasn’t at all unscripted — "It wasn’t even a little bit by accident," said one — knew Christie had all the momentum.
By the time Sweeney walked the millionaires tax to the governor’s desk on May 20, they had abandoned hope he would crack. They later went ahead with an anticlimactic veto override attempt — even as they were negotiating a budget deal that did not include the tax — in part to make GOP lawmakers sweat for backing their governor’s unpopular stance.
"I knew it was DOA. I was never under false illusions," Oliver said. "But that does not mean that politically that road should not be pursued."
A TOUGH SELL
Democrats were left with a budget they wanted no part of. If they presented Republican Christie with major changes, he could veto them and Democrats didn’t have enough votes to override him. An impasse on the budget at the July 1 deadline would force a state shutdown — something neither side wanted. So they agreed to an unprecedented arrangement: Democrats, the majority party, would provide just enough votes if Republicans owned the budget by sponsoring it and unanimously voting yes.
Riding high, Christie expected Republicans to be firmly behind his budget. He was wrong. In the Legislature, the minority GOP also showed it was not accustomed to having power.
Soon after his March 16 budget address, Christie summoned GOP lawmakers to the governor’s mansion and delivered the same speech he gave his cabinet: "We’re not going to apologize for this budget, we’re not going to rationalize this budget. We’re going to fight for it and we’re not going to give an inch."
But on June 21 — nine days before the deadline to avoid a shutdown — cracks began to show. As the GOP began lining up votes for the budget and supporting bills — responsibilities handled by Democrats for the past eight years — some lawmakers balked, saying they opposed fee hikes and cuts to school aid that landed disproportionately on their suburban districts. Several who committed to support Christie’s budget were unaware that also meant they needed to vote for fee-hike bills.
Text messages flew back and forth with Christie’s office, describing mutiny inside the Senate Republican caucus.
"Was there panic? No, there wasn’t panic," O’Toole said. "Was there deep concern? Yeah."
It was quickly decided the governor had to get in the game. That Friday, three days before the final budget vote, Christie met privately with Sens. Diane Allen (R-Burlington), Jennifer Beck (R-Monmouth) and Michael Doherty (R-Warren).
Doherty, who came on board after Christie agreed to kill a $5 million fee increase on small businesses, was enlisted to help persuade two conservative Assembly members who had declared they would oppose the budget: Michael Patrick Carroll (R-Morris) and Allison McHose (R-Sussex). Doherty’s actions enraged Steve Lonegan, the conservative activist who lost to Christie in last year’s GOP primary and remains a harsh critic.
Stung by Lonegan’s remarks, Doherty said privately: "I thought he was my friend. I guess he thought he was my boss."
Doherty worked the phones, even enlisting Marie Tasy, who leads the state’s largest anti-abortion group, to warn Carroll and McHose Democrats would demand $7.5 million in family-planning restorations if they were needed to supply two more votes.
Monday, the recalcitrant Assembly members met with Christie for the final sell. Both voted yes despite profound misgivings about the cuts to suburban schools. Carroll said he even considered quitting and may not run for re-election because of his vote.
I was playing Hamlet with myself," Carroll said. "To vote for it, or not to vote for it … to resign or not resign."
While Carroll and McHose did not get any sweeteners for their vote, the GOP senators’ $5 million concession caused headaches for Sweeney and Oliver, who’d secured money for some Democratic priorities under the deal with Christie to provide the votes. Their members now wanted to know why they couldn’t get more.
"It’s too far down the field, and not enough people were involved in the deal," Codey grumbled outside the caucus room.
Sweeney emerged, feeling the backlash. "Show me the money," he said. "It doesn’t exist."
Later that week, Sweeney called it an example of Christie’s built-in advantage as governor. "I make decisions and I try to build consensus. Chris makes decisions and runs with them," Sweeney said, adding that he was "amazed" at Christie’s control over Republicans: "They did exactly what they were told." Democrats used to "fight like hell" with Corzine, he said. With the votes finally in line, the Legislature signed off on Christie’s budget, but not before Democrats blasted it for hours on the floor of both houses. As the Assembly debated en route to a vote at 1:13 a.m. Tuesday, Christie watched on TV while playing nickel-ante gin and poker in his office with the lieutenant governor and a handful of key aides.
Democrats believe the tough budget will backfire on Christie, but they give him points for standing his ground. "My biggest regret is sitting back and not being more aggressive" in the budget fight, Sweeney said. He added that he showed Christie he was no pushover when the governor was forced to compromise on tax caps. "I was not going to let (Democrats) be chastised and talked down to, and we weren’t," Sweeney said.
Twelve hours after the budget passed, Christie signed it and began pounding away at the property tax issue — acting like the winner of a prizefight anxious for the next bout.
"It’s the first time I’ve ever done this," Christie told lawmakers in their conversations about the budget last week. "Listen, I’m going to get better at this."
Staff writers Josh Margolin, Lisa Fleisher and Matt Friedman contributed to this report.
Asbury Park Press ‘Deal now said to be reached on Tax Cap in NJ’
TRENTON — Republican Gov. Chris Christie and Democratic state Senate President Stephen M. Sweeney announced this afternoon that they had reached an agreement on a property tax cap that would limit increases to 2 percent a year, with several exemptions.
Christie and Sweeney hailed it as a key bipartisan breakthrough toward reining in what voters have said in polls for years is their top concern.
Democratic Assembly Speaker Sheila Y. Oliver, however, has not formally signed on to the deal, though Christie said he had spoken with her and was "optimistic" that she would ultimately agree.
Related
· Expected tax cap deal falls through
· Property tax cap deal expected today
· 23 Monmouth mayors back Christie's tax cap
· Democrats to defy Christie call to legislate through weekend
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""We decided that having significant progress is more important than who gets the credit or who gets the blame,'' Christie said at an afternoon news conference. He later added: ""In leadership, there's always a moment when you have an opportunity to get something done, and you better not let that moment go by.''
The deal was not roundly accepted.
Assemblyman Louis Greenwald, D-Camden, chairman of the Assembly Budget Committee, said "fine-tuning" needed to be done, such as possibly providing an exemption for municipalities where property tax collections have fallen off due to the poor economy.
Both the president of a group representing the state's municipalities and the state's largest teachers union said the cap as proposed was inadequate to deal with rising costs.
William G. Dressel Jr., executive director of the New Jersey State League of Municipalities, said the state should pass proposed changes to binding arbitration for labor negotiations and the civil service system before capping the property tax increases.
""This is a very hard cap, and it does not take into account the fiscal realities that mayors and governing bodies are under,'' Dressel said.
A statement by the New Jersey Education Association noted the cap proposal does not provide for exemptions for costs to educate disabled children or inflation.
Christie and Sweeney said they believed a series of bills, called the "toolkit," aimed at controlling local spending would be passed by early September. Those would include changes to labor negotiation rules and civil service.
The deal announced by Christie and Sweeney would exempt health care, pension, and debt or capital improvement costs from the 2 percent limit on property tax levy increases.
The cap would be written into state law. There would also be an exemption for expenses related to emergencies.
Related
· Expected tax cap deal falls through
· Property tax cap deal expected today
· 23 Monmouth mayors back Christie's tax cap
· Democrats to defy Christie call to legislate through weekend
Adjustments to school budgets because of rising enrollment, as currently allowed, would continue, Christie said.
If municipal officials wanted to exceed the cap, they could ask the voters to approve the increase. A simple majority would pass the vote.
Christie had earlier sought a 2.5 percent cap written into the state constitution that would only exempt debt or capital improvements. He also wanted a 60 percent supermajority of voters needed to approve exceeding the cap.
Christie said today that the changes showed again he could compromise with Democrats.
The Democrats had passed a 2.9 percent cap, with exemptions, and sent it to Christie last week. Under the deal, Christie will issue a conditional veto, and the state Senate is expected to vote on it Thursday.
Under the current 4 percent cap, passed in 2006, there are some 14 possible exemptions, and local officials can ask the state for permission to exceed the cap. State officials have granted 129 municipal waivers since 2008.
