Countdown to tax relief
Thursday, July 27, 2006

By HEATHER HADDON
HERALD NEWS

Legislators have scrapped vacation plans and may have to sweat out the summer in Trenton in a historic push to overhaul the state's sky-high property taxes.

Political bickering already began in the days leading up to the opening of the special legislative session on Friday, when Gov. Jon S. Corzine will address a joint gathering of the Assembly and Senate. But local legislators said they were feeling energetic and optimistic about the road ahead.

They'll need that enthusiasm, as experts say the state's reform experiment is nationally uncharted. "No state has had to do as much reform as New Jersey, because no system is as bad as New Jersey's," said Jon Shure of New Jersey Policy Perspectives, a nonpartisan research group.

In June, the Legislature agreed to reconvene to discuss property tax reforms that would be proposed by fall and enacted by year's end. The state budget deal dedicated half of the 1 percent sales tax increase to property tax reductions, though it did not specify whether that would be done by rebates or another method.

Committees were designed to study school spending, public pensions and benefits, municipal service sharing, and a possible constitutional convention.

Four Democrats and two Republicans from both houses will sit on each committee, totaling 24 out of 120 members. Assembly Republicans intend to form subcommittees to involve all representatives and solicit additional testimony.

Sept. 30 was the original deadline for crafting legislation. That date will probably be pushed back because the protracted budget negotiations that shut down nonessential state services earlier this month delayed the session's start, according to Joseph Donnelly, a spokesman for the Assembly Democrats.

The governor has called for a 20 percent cut to the $20 billion collected in property taxes statewide. Half of that total currently goes to school funding, with the rest mostly going to municipal services. In 2005, average property taxes in Passaic County were $6,039, with Wayne paying the most and Paterson the least.

Legislators are soliciting testimony on behalf of a ballot referendum to permanently dedicate half of the $1.1 billion revenue raised from the sales tax increase to property tax reductions. Over the past few weeks, Corzine has spoken on a number of proposals to curb statewide and municipal spending, including combining local services, regionalization and civil service reforms.

After Friday's address, Corzine expects lawmakers to act. "He will kick off the session with his speech and then the ball is in the Legislature's court," said Anthony Coley, a spokesman for the governor.

Jockeying around the committees began early. Republicans privately made some of their appointments earlier in the week, but no official announcements had been made by Wednesday.

Assemblyman Kevin O'Toole, R-Wayne, was confident that he would sit on the pensions and benefits committee. He said there were "obvious abuses" that can be remedied in these areas, including increasing the number of years of work that pension rates are based on. "I don't think it is fair to base pensions on the last three years," he said.

Assemblyman Gary Schaer, D-Passaic, advocates shifting state pensions into 401k plans, and instating co-pays in state medical coverage. He also supports Corzine's proposal to provide financial incentives to municipalities that share services. "I think it's a great carrot," he said.

State Sen. John Girgenti, D-Hawthorne, said that there had been some successful cases of service consolidation in his district. "A lot of people are opposed to it because of home rule, but we have to do it," he said.

John Moran, a legislative analyst with New Jersey State League of Municipalities, said that consolidating public services is comparatively easier than reducing property taxes through reopening contracts with public employees. "There's less of a political risk in addressing (services) than addressing the labor issues," said Moran.

A bill under consideration by the Legislature would smooth out some of the hurdles to consolidation, like establishing protocols and funding technical assistance.

Local legislators were less than optimistic about tackling school funding. "That's going to be a hard duck to crack," O'Toole said.

Corzine suggested recently that school funding should shift from districts to individual pupils. Schaer said he wanted to see more details on that proposal, but hopes that school districts can combine services or personnel. O'Toole said he'd like to see some cities removed from the Abbott District program, which provides substantial funds to schools in urban and low-achieving districts.

Local lawmakers were generally against a constitutional convention, where public delegates would formulate a reform plan before submitting any amendments to a statewide balloting. "If there's no choice, let's just do it," Schaer said. "But then, what's my job?"

Girgenti thought homestead rebates would be addressed at a later date, as the annual checks to homeowners are politically popular. He hopes to move away from rebates and toward a general tax rate reduction.

Legislators all spoke optimistically about the session's potential for substantial reform. "I have been in Trenton many years, and the focus here is stronger than it's ever been in the past," Girgenti said.

But some observers were more skeptical. "In all due respect to an enthusiastic governor and Legislature, they don't get the crux of the problem," said former Paterson Mayor Lawrence "Pat" Kramer, "The state has become too top heavy."

Bipartisan unity started crumbling earlier this week. Republicans intend to propose bills requiring that the four ad hoc committees have equal numbers of Democrats and Republicans. "The Democrats don't agree on this, but we believe they should have an even-steven number of members," said Sen. Leonard Lance, R-Flemington.

On Wednesday, the Regional Plan Association, a nonprofit organization, issued a report on comprehensive tax reforms calling for, among other things, a shift from property taxes to income taxes to pay for public services like education.

Henry Coleman, a Rutgers professor who has studied New Jersey's property taxes for decades, warned lawmakers to be realistic with their expectations for the session. "If nothing else, they should collect the information so someone else can look at (it)," he said.

Reach Heather Haddon at 973-569-7121 or haddon@northjersey.com.

From “Live from the Ledger” online Thursday afternoon, 7-27-06…..

Lawmakers say they'll push bills to limit public employee costs
Risking the ire of politically-powerful public employee unions, two South Jersey legislators said today they plan to introduce a 15-bill package designed to cut government costs by making many state and local workers contribute to the cost of their benefits, especially health coverage and pensions.

As part of the package, Sen. Stephen Sweeney (D-Gloucester) and Assemblyman Paul Moriarty (D-Gloucester) want current and new public employees to pay for at least 10 percent of their benefits. They want pensions for new employees based on their five highest annual salaries instead of the current three years, and to raise the retirement age for them from 55 to 60.

They also want to eliminate lifetime health benefits for new employees and their dependents, and abolish government payouts for sick leave for current and new workers.

Sweeney, who is active in the ironworkers union, went public with a number of these proposals during the recent state budget crisis -- and drew the anger of state worker unions. But he said "The response from citizens has been overwhelming."

"We have received thousands of e-mails and fielded hundreds of phone calls from taxpayers throughout the state voicing support for these measures. Now that the budget crisis is behind us, we are introducing a fair, two-tiered approach to deal with runaway compensation deals that are bankrupting our state and local government," Sweeney said.

Contributed by Tom Hester

Lawmakers debate dedicating part of sales tax to property tax reform
With Gov. Jon Corzine set to kick off a special legislative session on property taxes tomorrow, two legislative committees heard testimony today on a constitutional amendment that would dedicate half-a-cent of the seven-cents-on-the-dollars sales tax to property tax relief. This year, that would amount to $600 million.

The dedication of the money was part of a budget agreement the ended a long-standoff between Corzine and Assembly Speaker Joseph Roberts (D-Camden). The stalemate forced a week-long state government shutdown earlier this month.

Today, Democratic lawmakers described the proposal as a "down payment" on property tax reform.

"People are frustrated with property taxes and they are demanding results,'' said Assemblyman Jack Conners (D-Burlington). But Republicans said Democrats should have spelled out exactly what they plan to do with the money so it won't become a political slush fund for their districts.

"I think it's a big ruse. Meaningful property tax relief has to come from cuts and not just moving shells around on the table,'' said Assemblyman Sean Kean (R-Monmouth).

The proposed amendment received public hearings in the Assembly and Senate state government committees. It is expected to clear both houses of the Legislature tomorrow when lawmakers gather for Corzine's speech. The final say would then be up to voters in November.

Contributed by Joe Donohue

Property tax topic at special session

Corzine speaks to lawmakers Friday

Posted by the Asbury Park Press on 07/27/06

BY GREGORY J. VOLPE
GANNETT STATE BUREAU

TRENTON — Gov. Corzine will address the Legislature Friday, launching an effort to tackle state voters' top concern, property taxes.

After that, who knows?

With Democrats running the governor's office and both houses of the Legislature — a monopoly that nonetheless resulted in a state government shutdown during this month's budget dispute — Republicans already question whether the ruling party will be able to solve the highest-in-the-nation property tax dilemma. They were still waiting Wednesday night for Democrats to release a proposed set of rules, to be voted on Friday, that would outline how the special session proceeds.

"Blind," said Sen. Anthony Bucco, R-Morris, describing how GOP lawmakers head into the session.

"We weren't involved in the budget process, and it seems like we're not involved in this," Bucco said. "They're telling us what they're going to do, and we have to go along with it. I don't think that's appropriate or proper. There's two parties, and we have to work along so we can get this done and create the property tax relief that the people are clamoring for."

When Senate President Richard J. Codey and Assembly Speaker Joseph J. Roberts Jr. announced the session in June, they said there would be four joint Senate and Assembly committees, each comprising four Democrats and two Republicans.

The committees would look at school funding, employee benefits, shared services and whether to have a citizens convention to make constitutional changes to the property tax structure.

Nothing's changed, Codey said, calling on Republicans to help, not hinder, the process.

"Pipe down and be constructive and not disruptive," Codey said.

GOP wants budget panel

Republicans on Wednesday released a proposal that called for an extra committee to look at reforms to the state budget process to avoid stalemates like this year's government shutdown.

The GOP proposal also calls for eight-member committees split evenly between party and house.

Codey said budget reforms have a place during the session, but not in its own committee.

"There's a real determination on the part of the Legislature to do something that's serious and meaningful," Codey said.

Also Friday, the Legislature is slated to vote on a measure that would put a question on the November ballot formally dedicating half of the revenue from the penny-per-dollar sales tax hike, or about $600 million, toward property tax relief.

This was the compromise that got Assembly Democrats to OK the sales tax hike that Corzine sought, ending the budget feud.

The Assembly and Senate state government committees will hold a joint hearing on the measure at 10 a.m. today.

Corzine's administration remained tight-lipped about what the governor, who was working through his speech Wednesday, will propose Friday.

"He will be talking about a number of issues that seek to ameliorate the state's overreliance on property taxes," Corzine spokesman Anthony Coley said. "We can certainly expect a candid conversation with the Legislature, and quite frankly with the people of New Jersey, about how to finally fix what has become the public's No. 1 concern."

Coley said Corzine does not have a deadline for the Legislature to finish its work.

"The public is tired of waiting for Trenton to fix this problem," Coley said via e-mail. "After the governor delivers his speech, the ball is in the Legislature's court. He hopes and expects they will move expeditiously."

In June, when Codey and Roberts announced the session, there was a Sept. 30 deadline for committees to report to the Legislature.

Codey, however, said Wednesday he was not familiar with that deadline and called it "totally unrealistic." Joe Donnelly, spokesman for the Assembly Democrats, called the Sept. 30 deadline "counterproductive" given the time lost with the budget delay.

Codey said he expects the committees' reports around mid-November and still expects the Legislature to vote on bills by year's end.

Gregory J. Volpe: gvolpe@gannett.com

Property tax reforms: Where key Democrats stand

Posted by the Asbury Park Press on 07/27/06

THE VIEWS

Where the top three Statehouse Democrats have stood on property taxes:

GOV. CORZINE:

Wants a school funding formula based on children's needs, not districts'.

Has recently floated the idea of borrowing against the money gained from the sales tax hike to reward governments that consolidate services.

Supports having a citizens convention to propose changes in the tax structure.

Wants pension and ethics reforms that could save the state millions of dollars.

Will likely use the session to solicit support for a large plank in his campaign platform: an independent state comptroller to audit all aspects of government. "Long-term property tax relief requires that we confront the ugly truth of our fiscal condition: Fixed costs are rising every year at an unsustainable rate. Health care costs, salary and pension benefits for both employees and retirees are devouring more than our annual growth in revenues, and the trend is getting worse, not better,'' Corzine said during his campaign.

SENATE PRESIDENT RICHARD J. CODEY:

Opposes a citizens convention to propose changes in the tax structure.

Orchestrated the budget compromise in which half the new revenue from a 1-cent-per-dollar sales tax hike goes toward property tax relief.

Has said entitlements are the driving force behind increased state spending every year.

Has said the special session will focus on cutting costs at the local levels. "For too long property owners have been getting blitzed with taxes advancing further and further.

It's time that we not only hold the line but push them back,'' Codey said in June announcing the special session. "Unless we attempt to create greater efficiency and reduce spending at the local levels, we will only be chasing our tails.''

ASSEMBLY SPEAKER JOSEPH J. ROBERTS JR.:

Wants to offer financial rewards to government entities that consolidate services.

Supports a citizens convention to propose changes in the tax structure.

Resisted Corzine's sales tax hike, then agreed to the deal in which half the new money goes toward property tax this year; he's also pushing the possibility that all of it would go toward property taxes in future years.

In May, unveiled aims to cut waste and duplication in government. Its goals were to entice and make it easier for governments to merge or share services, find a new way to fund public schools and end pension abuse. "Property taxes, property taxes, property taxes is what we've been sent here, not just to talk about, but to finally do something about,'' Roberts said in January during his swearing-in ceremony.

Gannett State Bureau

More ‘Live from the Ledger’ Thursday 7-27-06

3 high schools 'persistently dangerous'
Three New Jersey schools have been tagged as “persistently dangerous” under the rules of the federal No Child Left Behind Act, but the announcement has once again raised doubts about how violence and other misbehavior is measured in schools.

The state today released the short list of dangerous schools as part of the annual school violence and substance abuse report, including the numbers of reported incidents for every district in the state.

The three schools - Trenton Central High School, East Side High School in Paterson, and Wilbur Watts Intermediate School in Burlington City - each reported a high number of serious incidents over the last three years.

The number of schools on the list dropped from seven last year, with Trenton’s high school the only repeat. And overall, the report showed some positive trends about the climate of the state’s public schools, including a 21 percent drop in violent incidents.

More than 70 percent of New Jersey school districts reported five or fewer incidents in 2004-05, and 38 percent listed no instances at all.

“As we’ve seen in past years, the vast majority of New Jersey’s schools are safe places for students and teachers, and very few schools have persistent problems,” said acting Commissioner of Education Lucille Davy.

Yet even state officials are now openly questioning the veracity of some of the numbers reported by districts and said they have asked 19 districts with significant decreases to review and confirm their reporting.

“The decline in the number of instances during this three-year period is unusual and we feel we have to dig a little deeper in order to make valid conclusions,” Davy said.

Click here to read the full report.

Contributed by John Mooney