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BEYOND
THE BLAME GAME TO PROPERTY TAX REFORM
By William G. Dressel, Jr.
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For some time
now, it has been fashionable for some in the media to blame
many, if not most, of our State's environmental, economic,
social and, most of all, property tax problems on "Home
Rule" - a system of local self government that gives
a concerned citizen maximum access to those who are elected
to administer public affairs and maximum impact on the decisions
that determine the course of public policy. This current
train of thought seems to suggest that municipal decision
making is necessarily inferior to that brand of polished
statecraft and profound analysis of issues routinely practiced
in the halls of power, in our Nation's and our State's Capitals.
With annual federal
deficits now running around $423 billion (not counting the
costs of war); with the national debt now at a staggering
$8 trillion and growing by the minute; with the State of
New Jersey mired in a $4+ billion deficit; and with all
of New Jersey's 566 municipalities able to operate with
balanced budgets year after year, who are we to question
anyone's preference for the efficiency, effectiveness and
inherent equity of larger, more expansive units of government?
And who could doubt that the root cause of all the problems
that we face is, as the sages assert, local decision making?
In the face of
all this evidence, who could ever blame local government's
state mandated over-reliance on regressive property taxes?
Sure. The property tax does account for about 45 percent
of New Jersey's state and local tax revenue. The national
average is just slightly above 30 percent. New Jersey property
taxes equal about 5.6 percent as a percentage of personal
income, compared with the national average of 3.6 percent.
And, yes. New Jersey households with incomes in the lowest
20 percent do pay 9.2 percent of their earnings in property
taxes; while the wealthiest 20 percent pay 3.6 percent.
But don't property taxes continue to go up year after year,
because of the profligacy of local elected officials and
despite the magnanimity of state budget makers?
In the budget
proposed by Governor Corzine, for the fifth straight year,
local property taxpayers will be denied the benefit of annual
inflationary adjustments that are required by State statute
in major formula municipal property tax relief funding.
In the 1990's, Legislators in both parties and in both Houses
recognized the fact that increases in population, prices,
wages and employee benefits - increases over which mayors
and governing bodies have little, if any, control - erode
the ability of local officials to keep a lid on property
taxes with "level funding." Appreciating that
fact, they put laws on the books that were supposed to preserve
the property tax relief benefits of at least two programs,
into the future.
We appreciate
the problems that are being faced by the Administration
and by the Legislature, as they struggle to responsibly
close a massive, inherited deficit. We only hope that they,
likewise, recognize how "level funding" contributes
to the problems being faced by local budget makers and the
property taxpayers, whom they have sworn to serve.
So be on guard
against those who refuse to acknowledge the connection between
"level funding" and inflation, on the one hand,
and rising property tax bills, on the other. Some, both
at the State and at the local level, may find it easier
to demagogue the problem, than to confront the need for
meaningful property tax reform. As always, it is easier
to place blame on others than to accept our share of the
responsibility for a failure to advance solutions that can
move our State beyond its chronic over-reliance on regressive
property taxes to fund essential programs and services.
And as always, playing that blame game does absolutely nothing
for the people who need immediate relief and who long for
lasting reform.
If the property
tax crisis is real, then maybe property tax reform would
help. If we move beyond the blame game, then maybe we can
move towards real solutions. That is why local officials
have asked for a special convention dedicated to property
tax reform. And that is the crying need of the property
taxpayers of our State.
With property
tax pressures almost certain to intensify this year, the
people of New Jersey must be given a hope for future relief.
They expect the Senate, the General Assembly and Governor
Corzine, to act on a property tax convention bill, in time
to get the question on this November's ballot. They need
nothing more than that. They deserve nothing less.
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NJLM - Beyond the Blame Game to Property Tax Reform
|
BEYOND
THE BLAME GAME TO PROPERTY TAX REFORM
By William G. Dressel, Jr.
|
|
For some time
now, it has been fashionable for some in the media to blame
many, if not most, of our State's environmental, economic,
social and, most of all, property tax problems on "Home
Rule" - a system of local self government that gives
a concerned citizen maximum access to those who are elected
to administer public affairs and maximum impact on the decisions
that determine the course of public policy. This current
train of thought seems to suggest that municipal decision
making is necessarily inferior to that brand of polished
statecraft and profound analysis of issues routinely practiced
in the halls of power, in our Nation's and our State's Capitals.
With annual federal
deficits now running around $423 billion (not counting the
costs of war); with the national debt now at a staggering
$8 trillion and growing by the minute; with the State of
New Jersey mired in a $4+ billion deficit; and with all
of New Jersey's 566 municipalities able to operate with
balanced budgets year after year, who are we to question
anyone's preference for the efficiency, effectiveness and
inherent equity of larger, more expansive units of government?
And who could doubt that the root cause of all the problems
that we face is, as the sages assert, local decision making?
In the face of
all this evidence, who could ever blame local government's
state mandated over-reliance on regressive property taxes?
Sure. The property tax does account for about 45 percent
of New Jersey's state and local tax revenue. The national
average is just slightly above 30 percent. New Jersey property
taxes equal about 5.6 percent as a percentage of personal
income, compared with the national average of 3.6 percent.
And, yes. New Jersey households with incomes in the lowest
20 percent do pay 9.2 percent of their earnings in property
taxes; while the wealthiest 20 percent pay 3.6 percent.
But don't property taxes continue to go up year after year,
because of the profligacy of local elected officials and
despite the magnanimity of state budget makers?
In the budget
proposed by Governor Corzine, for the fifth straight year,
local property taxpayers will be denied the benefit of annual
inflationary adjustments that are required by State statute
in major formula municipal property tax relief funding.
In the 1990's, Legislators in both parties and in both Houses
recognized the fact that increases in population, prices,
wages and employee benefits - increases over which mayors
and governing bodies have little, if any, control - erode
the ability of local officials to keep a lid on property
taxes with "level funding." Appreciating that
fact, they put laws on the books that were supposed to preserve
the property tax relief benefits of at least two programs,
into the future.
We appreciate
the problems that are being faced by the Administration
and by the Legislature, as they struggle to responsibly
close a massive, inherited deficit. We only hope that they,
likewise, recognize how "level funding" contributes
to the problems being faced by local budget makers and the
property taxpayers, whom they have sworn to serve.
So be on guard
against those who refuse to acknowledge the connection between
"level funding" and inflation, on the one hand,
and rising property tax bills, on the other. Some, both
at the State and at the local level, may find it easier
to demagogue the problem, than to confront the need for
meaningful property tax reform. As always, it is easier
to place blame on others than to accept our share of the
responsibility for a failure to advance solutions that can
move our State beyond its chronic over-reliance on regressive
property taxes to fund essential programs and services.
And as always, playing that blame game does absolutely nothing
for the people who need immediate relief and who long for
lasting reform.
If the property
tax crisis is real, then maybe property tax reform would
help. If we move beyond the blame game, then maybe we can
move towards real solutions. That is why local officials
have asked for a special convention dedicated to property
tax reform. And that is the crying need of the property
taxpayers of our State.
With property
tax pressures almost certain to intensify this year, the
people of New Jersey must be given a hope for future relief.
They expect the Senate, the General Assembly and Governor
Corzine, to act on a property tax convention bill, in time
to get the question on this November's ballot. They need
nothing more than that. They deserve nothing less.
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