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1-30-07 Tax Caps bill, A1, passes Assembly late last night
1-30-07 Tax Caps bill, A1, passes Assembly late last night This bill, having been only introduced later Friday into the weekend (the public dialogue process having been avoided completely), still needs to be adequately reviewed and analyzed. There are many questions and some misinformation about it that require further clarification.

However, there are some initial concerns that can be noted:

A cap on taxes can be uneven within local districts given how much revenue is based on local taxes counter-balanced by how much state aid is forthcoming and how much that aid might be distributed. GSCS has consistently pointed out that without school funding put in place, the property tax crisis will not go away, nor will school revenue be stabilized;

Other initial concerns are that The Commissioner is given the power to reschedule the date of school elections simply by a regulatory change.

There are no provisions for appeals.

School budget elections are NOT eliminated, but a public 'override' vote of the tax levy cap is allowed when a district constraints require the cap to be exceeded - but a 60% super majority of voter turnout is required by the bill (from April 08 to April 11; a simple majority stays in place for the April 07 budget election year) in order for the public question to pass (certainly that 'super majority' mandate would be a new elections requirement, singularly applied & thus problematic)...

Exemptions and waiver options are in place in the bill that recognize the reality of cost drivers that are beyond the control of local districts. It is important that they remain in the bill.


News articles 'Property tax credits, caps clear Assembly easily, head for Senate 20% credits, 4% caps approved by 71-8 vote' Posted by the Asbury Park Press.....

'Bill offering $2B in tax credits clears Assembly Homeowner-relief measure heads to Senate as 3 others go to Corzine' - Star-Ledger More...

Property tax credits, caps clear Assembly easily, head for Senate

20% credits, 4% caps approved by 71-8 vote

Posted by the Asbury Park Press on 01/30/07


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TRENTON Plans for a 20 percent property tax break for most homeowners and a 4 percent cap on annual property tax hikes took another step forward Monday in the Assembly.

The plan, introduced late Friday, was passed, 71-8, after roughly four hours of debate.

"This is a double dose of property tax relief and reform our residents have asked for and so desperately need," said Assembly Speaker Joseph J. Roberts Jr., D-Camden.

The credits and caps are the highlight of Democrats' property tax reform plans after six months of work on the issue. The proposals now head to the Senate, which could vote on them as soon as Monday.

The bill was one of several central pieces of property tax reform that won approval during a marathon voting session. The Assembly also approved a ban on legislators holding more than one elected office, beginning in July, but with exceptions for officials who currently have more than one post. The bill allows those holding dual offices to move between the Assembly and Senate by 2008. A similar plan is scheduled to come up for a vote Monday in the Senate.

By overwhelming margins, the Assembly also approved some pension reforms, the creation of a state comptroller's office and stronger penalties for corruption and elimination of some education mandates. The Assembly concurred with Senate changes to bills on the comptroller and a study team to recommend municipal mergers. Each of these plans now heads to Gov. Corzine for his signature.

GOP's misgivings

Republicans generally supported the bills but said the final versions fell short of the "historic" changes promised last August.

"This is one of our low moments. This could have been and should have been one of our high moments," said Assemblyman Kevin O'Toole, R-Essex. "In your hearts you know we could have done better. But we had to do the political thing."

The tax cap is aimed at preventing property taxes from growing at the 6 to 7 percent clip seen in recent years, but Corzine said it will likely take time for the limit to have a significant impact, due largely to existing contracts and pension obligations.

"In the first year I don't think it will be a great break from the 6 to 7 percent, but then it should be moving down each year," Corzine said.

The cap allows exceptions for some spending, including debt, capital projects and some health insurance costs.

The credits will range from 20 percent for homeowners earning $100,000 or less to 10 percent for those earning between $150,000 to $250,000; homeowners in between will receive 15 percent credits. The tax breaks will be applied to the first $10,000 of homeowners' property tax bills. The plan also doubles the amount set aside for tenant's property tax rebates, to $252 million.

Senior citizen homeowners, who currently receive up to $1,200 in property tax rebates, would keep the larger of either the new credit or their existing rebate.

"It's a big letdown," said Tony Angelella, a retired Manchester resident who currently receives a $1,200 rebate on his $4,000 property property tax bill. He is among many seniors who will receive no added relief.

Homeowners under age 65 received an average of $285 in rebates last year; most of them would see a boost in tax relief.

While lawmakers hope to deliver the tax breaks as direct credits, they may remain in the form of rebate checks this year while the Department of the Treasury attempts to create the credit system.

Questions remain on how to pay for the credits after the first year. Assemblyman John Burzichelli, D-Gloucester, said there is a $300 million to $700 million gap in funding after year one, which he said could be found with savings in the state's $31 billion budget.

Other tax-reform bills

The ban on holding two or more elected offices, approved in the Assembly by a 78-1 vote, would "grandfather" in officials who hold more than one office on July 1. Assembly and Senate lawmakers who currently hold two or more offices could change houses and keep both jobs until 2008.

It also creates a less-generous pension system for newly elected and appointed officials.

"With passage (of this bill) we can demonstrate that we have the desire and the willingness to clean up our house first," said Assemblywoman Nellie Pou, D-Passaic.

The bill requiring mandatory jail time and pension forfeitures for corrupt public officials passed 79-0.

The comptroller plan passed 47-30, despite criticism that changes in the Senate would weaken the watchdog office.

Corzine conditionally vetoed two bills on Monday and recommended minor changes. One bill called for an inspector to review Medicaid spending; Corzine said it should be created in the existing Inspector General's Office. Corzine also called for technical changes to a bill reorganizing the Division of Risk Management and Office of Information Technology.

Bill offering $2B in tax credits clears Assembly

Homeowner-relief measure heads to Senate as 3 others go to Corzine

Tuesday, January 30, 2007


Star-Ledger Staff

The Assembly last night approved a $2 billion program of property tax credits that would mean a 20 percent reduction in many homeowners' tax bills and put new limits on increases in local government spending.

While sending that bill to the Senate for action next week, the Assembly gave final approval to three other measures designed to reduce the government spending that drives up property taxes. Those three bills now go to Gov. Jon Corzine.

One would establish an appointed state comptroller to monitor public spending; another would mandate pension forfeiture for public officials convicted of criminal acts, and the third would set up a special commission to identify towns and school districts ripe for merger.

The Assembly made last-minute changes to another pension reform bill, sending it back to the Senate with amendments that would outlaw dual-office holding for future elected officials and restrict the ability of professionals to run up huge public pensions for part-time government work.

"We are at the closing stages of a historic, first-of-its-kind, special session exclusively dedicated to property taxes," said Assembly Speaker Joseph Roberts.

Roberts (D-Camden) opened yesterday's meeting with a speech decrying critics who contend the Legislature is coming up short of achieving meaningful property tax reform. "This reform menu is nothing to apologize for. In fact it's historic," he said.

Republicans, although they supported most of the reform bills, declared the seven-month effort to rein in property taxes a failure.

"We just promised so much, and it's obvious we are going to give so little," said Assemblyman Joseph Malone (R-Burlington).

Gov. Jon Corzine suggested homeowners are likely to see rising tax bills again next year, even with enactment of the reform measures.

"In the first year I don't think it will be a great break from the 6 percent to 7 percent (increase in taxes every year), but then it should be moving down each year," the governor told reporters in Trenton early in the day.

Corzine promised a "line-by-line review" of the bills headed to his desk.

The tax credit program, the centerpiece of the Legislature's effort to provide tax relief this year, touched off a four-hour debate in the Assembly chambers that ran into the evening. By the time the bill (A1) was approved, 71-8, the rest of Statehouse was largely deserted and the gallery overlooking the lawmakers was empty.

As approved by the Assembly, the tax credit bill would dispense just over $2 billion to 1.9 million homeowners based on their incomes. About 1 million renters would share in a separate $252 million in rebates -- double the amount they currently collect from the state.

For most homeowners, the new tax credits would represent a sharp increase in benefits compared with the state's current property tax rebate program. It also takes in homeowners earning between $200,000 and $250,000 who are not eligible for the current program.

To keep local government spending in check, the bill would impose a 4 percent cap on the growth in any government's tax collections each year -- including, for the first time, limits on fire districts.

As approved yesterday, the bill would exempt about a fourth of a typical community's expenses from that cap -- including bond payments, exceptional increases in health care costs, scheduled growth in pension contributions, and revenues from new real estate. In addition, local officials and school boards could appeal to the state for cap waivers to accommodate expenses like rising fuel costs.

At his news conference, Corzine suggested that menu might be too broad.

"If the DCA grants waivers on every item listed, then we would have a cap that would not be useful," he said, referring to the state Department of Community Affairs.

Republican members of the Assembly called the proposed cap ineffective.

"This will result in increases in taxes at the municipal level in many municipalities," said John Rooney (R-Bergen), a former mayor of Northvale. "For municipalities that are doing a good job, this will turn around and bite them on the butt."

But bill co-sponsor John Burzichelli (D-Gloucester), who is also mayor of Paulsboro, said he is optimistic the new caps will prove effective.

"I think we're making progress," he said. "It's all a work in progress."

In amending the pension reform bill (A21), the Assembly resurrected a proposal to ban the practice of elected officials holding more than one office simultaneously.

As adopted, the new restriction would prohibit anyone elected to an office after July 1 from holding multiple offices. Currently, 18 of the Legislature's 120 members hold other elected posts; they would not be affected unless they sought other offices in the future.

Democrats rebuffed a motion by Republicans to have the ban take effect in 30 days.

"This legislation strikes at the entrenched core of abuses in the system," said Assemblyman Tom Giblin (D-Essex).

The Assembly also toughened a provision to stop lawyers, engineers and other professionals from tacking together pensions from multiple government jobs. An exception written in by the Senate for municipal assessors, inspectors, tax collectors and certain others was removed. The bill now must be reconsidered by the Senate.

Senators also are still weighing the fate of a bill (S10) that Roberts steered through the Assembly, which would impose a host of controls on local governments, including a provision to establish new county superintendents with veto power over local school budgets.

Staff writer Joe Donohue contributed to this report.


Garden State Coalition of Schools
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