STATEMENT BY THE HONORABLE GEORGE A. SPADORO,
NJLM PROPERTY TAX REFORM REVIEW COMMITTEE
THE NEW JERSEY PROPERTY TAX REFORM CONVENTION TASK FORCE
TUESDAY, OCTOBER 19, 2004
CAMDEN COUNTY COMMUNITY COLLEGE
GABRIEL E. DANCH CIM CENTER
BLACKWOOD , NJ
Chairman Van Horn, Vice Chairman Cole and other distinguished members of the task force, I am George Spadoro, Mayor of Edison, New Jersey and a leader in the League of Municipalities’ fight for a constitutional convention for property tax reform. I appreciate this opportunity to testify on behalf of the League of Municipalities on the most pressing issue facing municipalities throughout New Jersey – the need for real property tax reform.
From my unique vantage point as a former legislator who is now a mayor of the fifth largest community in New Jersey, I know as well as anybody the difficulty local governments face to deliver quality services while trying to control the growth of property taxes. But as a former legislator, I know all too well the inability of the Legislature to deliver a viable alternative to New Jersey’s failed property tax system, which is the major funding source for public education and local government services.
For years I have been a vocal and tireless advocate for convening a constitutional convention, which is the only real hope to end our over reliance on property taxes to fund public education and local government services.
As the Mayor of a one of the largest, most vibrant suburban communities in the state, I am in a unique position to assess the destructive impact of our current property tax system. During my nearly 11 years as Mayor of Edison, I have followed sound fiscal policies to keep our community strong, delivering necessary services within prudent budgets. We make proper use of capital financing to pay for long-term improvements. We have one of the largest local economies in the state – to the point where Edison is now identified as one of the New Jersey’s main suburban employment centers. So we have plenty of commercial ratables to limit the burden on our residential taxpayers. The fact is we have a ratable base of over $10 billion in Edison – the largest in the state. Yet we’ve kept our rate increase in municipal spending at the rate of inflation while still delivering essential services. We implemented efficiencies whenever they made sense, whether through shared services agreements, public-private partnerships, or taxpayer friendly union contracts. And we’ve pursued a number of new non-property tax revenue sources. And even through I’ve run municipal government with fiscal restraint; our property taxes have gone up. Our taxes increase mainly because of our school budget, which is about at the statewide average for cost per pupil. The main reasons for Edison's increase in property taxes is decreasing state aid and the unfair way the state raises taxes to pay for education and local services.
Clearly New Jersey’s over reliance on property taxes cannot be fixed with small steps, like resorting to rebate checks and incentives to keep taxes level on just the municipal side. We need to develop fundamental reforms that provide new revenue sources to pay for necessary local services that will actually reduce the property tax rates for those who need it most – our seniors on fixed incomes and young people trying to build families and own homes. We must end the cruelty of using a property tax system to fund local government and public education that has an elderly widow living on social security paying the same property tax bill as the next door dual income family with much more disposable income. Many families and seniors cannot wait any longer for the political system to find the will to change this; the will must be there to allow the people to change it through a constitutional convention.
My good friend, and Task Force member, Senator John Adler and I have long discussed the need for a real solution to property tax reform that the public would endorse. Senator Adler was on target in his assessments he gave on May 21, 2003 about why the legislature will not solve this problem without a citizens’ property tax reform convention when he said:
"The people are way ahead of the politicians on property tax reform. The politicians have offered too little, too late. It's time to turn property tax reform over to the people of New Jersey.
"I have faith in the people of our State and I believe they'll succeed where we have failed."
I, too, strongly believe that having a constitutional convention now is our only hope for solving the property tax problem in this state.
While it is not your job to provide the property tax solution, it is the job of this task force to develop the framework getting the Legislature to pass a property tax reform constitutional convention ballot question that will gain the voters’ approval so that a convention can start in 2006.
The scope of the convention, the delegate selection process, the convention operation and the treatment of its recommendations all have to be developed with the overriding goal of producing a successful constitutional convention process that will gain public support at the ballot.
While many may raise the issue of whether this constitutional convention process should look at spending issues, the more important fact is that we need to focus on finding a fairer way of raising what we have to spend at the local level.
That needs to be the primary focus of a special convention dedicated to property tax reform. That is a goal I have long advocated as has the League of Municipalities and all the other early advocates of this approach. And that is most compelling need of New Jersey’s property taxpayers –especially our senior citizens.
While there is merit in the position that the convention should the opportunity to look at certain spending, it needs to be addressed after a fairer revenue system is in place. If you allow the two issues to be tied together in the scope of the convention, we risk losing this historic opportunity. We can only succeed in enacting a fairer revenue system by keeping the question of raising the revenue separate from the spending issue.
I support the consensus that is developing and supported by the League that constitutional reforms to the revenue issues have to be ‘revenue neutral’ solutions to the property tax crisis.
I believe that delegates should be elected using current legislative districts or some other representative format to ensure the closest possible adherence to the principle of “One Person, One Vote.” I personally believe that the membership of the convention should provide for an adequate number of Mayors and other local officials since we know best what needs must be met in fixing the property tax problem. While other officials should be eligible to serve, your task force must come up with some method of guaranteeing that an appropriate number of Mayors, especially from the 25 largest communities, are convention delegates. Perhaps through allowing an appropriate official to appoint a set number of Mayors as “super delegates”. The Convention should judge the qualifications of its members, provide for filing vacancies, select its own officers, adopt its own rules and govern its own procedures. Provision should be made for staffing. The time and place of first meeting should be specified. Delegates should be compensated at rate equal to average State worker and entitled to similar reimbursements.
The League supports ratification of the call for a convention by a majority of those voting on the question. NOT a super majority or a majority of those voting in the election. Many will not bother to vote on the question, since the majority of the information they receive will be about the candidates for office at the top of the ballot, rather than about any ballot questions at the bottom of the ballot. The League also supports ratification of both the call for a convention and the delegate election at the 2005 general election. The constitutional convention’s recommendations should then be on the November 2006 ballot. With both a major Gubernatorial election next year and a Senate seat race in 2006, turnout for each election should be high enough to gauge popular support of interested voters. This schedule would prevent a minority of interested voters from unduly influencing the vote, as might happen with Spring or other special elections.
Likewise, ratification of the convention’s recommendations should be by a majority of those voting on each recommendation.
The League supports a convention of 3 months duration and a requirement that recommendations be approved by a majority, rather than a super majority of the delegates.
Of course there can be compromise on all these procedural issues. This Task Force can and should debate the merits of these points and other viewpoints raised by others. The underlying need is to develop a fair and open constitutional convention process that can be enacted by the Legislature and follows the basic premise that we can trust the voters of this State.
I trust this task force will proceed with great care to produce a framework that will allow for a constitutional convention to commence.
Our citizens, especially those on fixed incomes will never forget or forgive us if you do not establish a fair and open mechanism for a convention that will ensure a successful and careful deliberation of a recommended solution to New Jersey’s citizens to fix a long broken property tax system.
Thank you for your time and attention.