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1-30-07 'Is Property Tax Plan Legal?'
Is Property Tax Credit Plan Legal? Tuesday, January 30, 2007

The Assembly has passed a property tax reform measure that would provide property tax cuts in the form of credits. Under the bill almost 2 million homeowners would get help. A 20 percent tax cut would go to households earning up to $100,000, there would be a 15 percent cut for those earning up to $150,000 and a 10 percent cut for those earning up to $250,000. Renters who have received $75 rebates would see relief doubled.

Democratic leaders are hailing the legislation as landmark but, some Republicans are questioning the constitutionality of the bill and they've got history to back them up. At the turn of the last century (1903) the legislature voted to give a bigger property tax break to firemen but the State Supreme Court ruled that it could not happen without residents voting to amend the constitution. That's because of the Uniformity Clause which says all property must be taxed at the same rate, it cannot be based on a landowner's income, it must be based on the value of the property.

Is Property Tax Credit Plan Legal?
Tuesday, January 30, 2007 - Millennium Radio New Jersey
kevin-mcardle.jpg
 Kevin McArdle
 
The Assembly has passed a property tax reform measure that would provide property tax cuts in the form of credits. Under the bill almost 2 million homeowners would get help. A 20 percent tax cut would go to households earning up to $100,000, there would be a 15 percent cut for those earning up to $150,000 and a 10 percent cut for those earning up to $250,000. Renters who have received $75 rebates would see relief doubled.

Democratic leaders are hailing the legislation as landmark but, some Republicans are questioning the constitutionality of the bill and they've got history to back them up. At the turn of the last century (1903) the legislature voted to give a bigger property tax break to firemen but the State Supreme Court ruled that it could not happen without residents voting to amend the constitution. That's because of the Uniformity Clause which says all property must be taxed at the same rate, it cannot be based on a landowner's income, it must be based on the value of the property.

Assemblyman Steve Corodemus says, "The proposed credit plan is the same thing as giving blue eyed taxpayers a break as opposed to brown eyed taxpayers." That may be breaking the issue down to the least possible denominator but, Corodemus says, "Property is property. There could be two identical townhouses next to one another and one owner gets a 20% property tax cut and his next door neighbor gets 10% simply because one guy makes $95,000 and the other makes $151,000."

"If you want to treat people differently based on their personal characteristics," says Assemblyman Rick Merkt, "it requires a constitutional amendment, "it's unclear….the arguments would be that yes, it does violate (the uniformity clause) because it ends up not to have a uniform tax rate because people are paying different amounts based on their income but the counter argument is that the uniformity clause is being honored because people are all paying the same basic tax rate at the local level, the change comes out of money from the state coffers that's being returned to people at different levels."

"Even though this is money being returned from the state to people," says Williams, "it actually operates in the real world to have people paying different tax rates at the end of the day."

In the final year of the Jim McGreevey administration, the entire tenure of Dick Codey's administration and for the first year of the Corzine administration, property tax rebates have been capped based upon the income of the applicant. Williams doesn't buy the argument that because it has been happening, it must be okay. He says, "Nobody has challenged it, if a case were to be brought up, it would be unusual of the court to make anything of the fact that it's been going on for awhile, the court would address it for the first time and rule on it as it is occurring now."


By: Kevin McArdle


Garden State Coalition of Schools
160 W. State Street, Trenton New Jersey 08608
609-394-2828