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Analysis: The More You Earn, The Better Christie’s Property Tax Record Looks

Property taxes rise half as much under Christie as Corzine, but those making under $150,000 pay more under Christie once rebates are deducted

Gov. Chris Christie yesterday claimed victory in the battle against property taxes, touting a 1.3 percent statewide increase in 2013 as evidence that his programs are working. But Christie’s approach to property taxes has benefited wealthier New Jerseyans more than middle-income and working-class homeowners.

For families and individuals earning more than $150,000, Christie’s success in limiting average property tax increases to 9.7 percent during his first four-year term is a clear improvement over the 20.1 percent hike during his Democratic predecessor Jon Corzine’s four years in office.

But that’s not the case for homeowners making up to $75,000, senior citizens earning up to $150,000 and renters whose large Corzine-era property tax rebates were cut or eliminated by Christie. With the cuts in the rebates included, net property taxes for lower- and middle-income residents actually rose 20.3 percent under Christie compared to 14.1 percent in Corzine’s four years, a New Jersey Spotlight analysis of state Department of Community Affairs property tax tables shows.

Assessing the impact on property taxes of the 2 percent cap, the pension and health benefits overhaul, and limits on interest arbitration pushed through by Christie in partnership with state Senate President Stephen Sweeney (D-Gloucester) and other Democratic legislative leaders is critical to the ongoing debate over whether New Jersey needs to cut its highest-in-the-nation property taxes or simply continue to limit property tax growth:

  • New Assembly Speaker Vincent Prieto (D-Hudson) and Assembly Majority Leader Lou Greenwald (D-Camden), who has been the leading proponent of property tax reform in the Legislature, pledged in January to make property taxes their top priority. Greenwald proposed a 20 percent property tax deduction of up to $2,000 on state income taxes that would have been funded partly by a millionaire’s tax in 2012. He has discussed allowing municipalities to levy local sales taxes, as towns in other states do, and is one of a growing number of Democrats who are open to the idea of calling a constitutional convention for property tax reform.

  • Sweeney has once again introduced “carrot and stick” legislation that would push municipal consolidation and shared services not only by providing incentives but also by penalizing municipalities that refuse to take advantage of cost-saving initiatives by taking away an equivalent amount of state aid.

  • Christie included $8.5 million in his budget for the upcoming fiscal year to provide challenge grants to municipalities for consolidation or shared services. Christie frequently cites the example of Princeton Borough and Princeton Township, which merged last year. And at a town hall meeting yesterday, he once again held up his own hometown of Mendham Township and neighboring Mendham Borough, which it surrounds, as prime candidates for consolidation.

  • The leadership of the New Jersey State League of Municipalities yesterday held a press conference to back Christie’s call to make the 2 percent cap on interest arbitration awards for police and firefighters permanent. The day before, an eight-member state task force split 4-4 on the issue, with Christie’s three appointees and a Republican assemblyman calling for a permanent interest arbitration cap, and the four union representatives opposed.

  • Christie also is pushing for a ban on retirees cashing out unused sick leave and seeking changes in the civil service law that would make it easier for municipalities that plan to consolidate or share services to break union contracts, which is what happened when the city of Camden dissolved its police department to join a Camden County police force that has no other members.

Sufficient Progress

For Christie, holding down actual property tax growth represents sufficient progress. He made that clear in January 2012 when he declared that limiting property tax growth to 1.6 percent the previous year showed that his property tax initiatives were working and called for the state to put $1.4 billion into a 10 percent across-the-board income tax cut that would primarily benefit the wealthy, rather than restoring the cuts in property tax rebates.

When the Democratic-controlled Legislature refused to consider his income tax cut for “job creators,” Christie switched his support to a plan by Sweeney to offer a property tax credit of up to $1,000 on state income taxes to be paid for out of future revenue growth, but Christie’s revenue projections failed to meet expectations.

That option for attacking property taxes is no longer viable: Too much of New Jersey’s future revenue growth is being eaten up by increases of up to $600 million each year in state pension payments mandated by the 2011 pension and health care overhaul.

And while Christie has been weakened politically by Bridgegate, the Republican governor is sticking to his “no new taxes” pledge as he continues to contemplate a 2016 presidential run -- which would rule out not only the new local option taxes that Greenwald and others have discussed, but also a revenue-neutral shift from property taxes to other broad-based taxes.

The Municipal Benefit

Ironically, the pension overhaul that is devouring so much of the annual increase in tax revenues as New Jersey makes up for 15 years of state government skipping pension payments for state workers and for teachers has had the opposite effect for the state’s 565 municipalities, which kept up with their annual pension obligations. The pension bill’s elimination of cost-of-living increases for retirees, increase in pension contributions by municipal employees, and hike in the retirement age will save municipalities an additional $135 million on their pensions this year, which will help them stay within the 2 percent cap imposed by Christie and the Legislature in 2010.

For the past two weeks, Christie has highlighted the 1.3 percent property tax increase at town hall meetings as evidence that he is bringing property taxes under control, and Community Affairs Commissioner Richard Constable underscored Christie’s message yesterday when his department released the official town-by-town figures.

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