August 4,2006
Consolidating would help lower property taxes, rising
TO THE EDITOR:
The elephant in the room during the recent state budget battle was property taxes and how to provide relief to people just trying to make ends meet.
Our state leaders are rolling up their sleeves at a special summer session, hopefully producing long- term solutions and ending our dubious distinction of having the. highest per capita property taxes in the nation. Everyone involved in this debate knows that in order to enact real change, radical ideas will have to be accepted and the status quo will no longer be acceptable. Property tax reform will only happen when there is consolidation of some of the more than 1,000 layers of government that currently have taxing authority.
The rationale for this system is to allow for mass democratic involvement of our citizenry. We do not have mass involvement, only massive redundancies and the costs associated with them. Consolidation, however, would mean fewer schools, fire and police departments and municipal governments and more shared services - a frightening and confusing concept for residents accustomed to the way things have always been.
At the conclusion of the budget battle. Governor Corzine won about $600 million to help balance the budget through the imposition of another cent on the sales tax, half of which would off- set operations. The other half of the penny earned has been earmarked for property tax relief, which clearly means different things to different people.
I am concerned that the $600 million will become just another redistribution of funds, spread so thin that the impact will be nearly meaningless. Certainly senior citizens, those on fixed incomes and the working poor can well use any dollar they get. But is that the best use of the $600 million?
We're getting to the point in New Jersey that the rebates offered in October constitute a single digit reduction of our ever raising taxes, if that. Used more creatively, the money could get at the heart of what really drives property taxes: Schools and municipal services.
If the money were put into a fund to incentivize municipal and school consolidations, as the governor and some in the legislature have suggested, we'd see a significant and sustainable decrease in property taxes. Home rule seems to be the boogieman that everyone points to when saying that consolidations will never happen. I, for one, don't care what community's name is on the side of the fire truck when it arrives to douse the flames engulfing my home, I suspect that most would vote for consolidation if we were to quantify the cost of maintaining and growing our own fiefdoms.
Let's get real about who we are and what can be done to make New Jersey more affordable for all of our families and employers. Let's provide significant amounts of money to those brave communities looking for ways to maintain quality services without driving taxpayers out of their homes and businesses. Other states have done it.
In theory, we all want to control everything in our hometown. In practice, how many of us actually do anything to control our local destiny? Take a look at the turnout for the school board elections if you're looking for a clue.
We work hard, take care of our kids and are bright, successful people. Hard to believe that we can't grasp what every large bank in the country has figured out. There are, indeed, economies of scale. Is it worth an additional S2,000 a year in property tax to be sure that the fire truck has your communities name on it?
Joan Verplanck
President
New Jersey Chamber of Commerce
Upon seeing this letter I wrote my own praising the position of the Chamber of Commerce and also set forth my exchange with the former Congressional aide. I set forth a copy of my letter as it appeared in the Fort Lee Suburbanite.
Scheller asks Schwartz how NJ Could cut taxes
TO THE EDITOR:
I would like to express my appreciation and agreement with the letter from the New Jersey Chamber of Commerce which appeared in the Aug. 4 edition of your paper. I want to add just one caveat and that is that the letter ends with a reference to consolidating fire services. That is the easy part. Schools are the sticking point.
On the subject of taxes I would like to share with your readers an exchange I had recently with a former Congressional aide, Stephen E. Schwartz.
Mr. Schwartz wrote:
"I have never started a grass-roots campaign, although as an aide to Congressman Bill Pascrell I certainly worked with a few. I now see the need to start the back to six campaign. If you are puzzled by the plan to raise the sales tax to 7 percent only to take half the money raised and give it back in the form of property tax relief then you are not alone. Since when is the government a revolving door for our money? "It does not take an accountant to see that the numbers do not add up. The average person will still pay more in taxes. The governor and the legislature need to hear from us or they will not realize how displeased we are by this increase. Given the slump in the real estate and stock markets, rising gas costs and rising interest rates,where will we find the money to pay an extra 1 percent on each and every purchase "Given the slump in the real estate and stock markets, rising gas costs and rising interest rates, where will we find the money to pay an extra 1 percent on each and every purchase? For example a gallon of milk now costs about two cents more and a Toyota Camry now costs $182 more.
"The working men and women of this state will be extremely squeezed by this increase. Even with this so-called property tax rebate, property taxes are still too high. Now the sales tax is too high. The cost of living in New Jersey is fast becoming too high. The excuse for the increase is that; New Jersey has a big debt. Well, forcing hard working people to leave New Jersey or simply spend less money will shrink the amount of taxes collected and result in more debt.
"We need to send the governor and the legislature back to the drawing board. Please forward this email to anyone you know and have them email me directly. I will then collect the thousands of emails and forward them to the Governor's office. If I get enough emails, I will alert the media as well. Thank you for your attention.”
To which I replied:
"I find myself puzzled and dismayed by the views set forth in your message. What exactly are you advocating? Is it that New Jersey should operate by running an ever larger deficit while its credit rating plummets and the interest on its debt goes higher and higher? Surely you are savvy enough to know that this is a formula for disaster. Are you advocating that New Jersey should balance its budget by cutting expenses? If so, please spell out where you believe the cuts should be made. Should they be made in Medicaid? In highway maintenance? In the maintenance of state parks? In aid to school districts? Where do you believe cuts can be made without a cut in essential services?
"If you are objecting to the fact that the increase in the sales tax will not deal with the deficit if it is to be used to defray real estate taxes and that it should be dedicated to its original purpose to close the budget deficit as Governor Corzine intended, than I can see merit in your position, but that is hardly clear from your campaign.
"If you are arguing that a surcharge to the income tax would make more sense, particularly if it were to be limited to upper incomes such as more than $100,000, because a sales tax is regressive while the income tax is at least moderately progressive, than I can see the merit of such an argument.
"But if you are simply against all tax increases without discussing alternatives than I suggest that you are indulging in demagoguery worthy of our Republican 'friends'.
"I think you owe it to me and all those to whom you directed your appeal to explain exactly what your position is, and exactly what you are advocating”
I never received a response.
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3 comments:
Improvements sometimes must be made incrementally.
Along those lines, I can say, since I lived in Connecticut at the time, that state took a giant step some years ago by abolishing county government. Except as geographical designations, counties do not exist in CT-no county court, jail,sheriff, taxes, etc. It worked, and is still working!
I don't think that the Connecticut experience could successfully be transplanted to NJ.
While abolishing County Government might help, it would be a drop in the bucket. No state that I know of has the many small towns that NJ has. Thus a town having 2,000 inhabitants or even less might have its own fire department, police department, and worse of all, its own school system, with its own School superintendent who might make $150,000 or more, not to speak of Principals reigning over tiny schools. Unless the towns combine and stop insisting on their fiefdoms, the major duplications and the waste that it engenders would not be substantially effected and neither would property taxes.
Of-course, none of this deals with the state wide deficit which is the heritage which we have from Christy Whitman's Income tax cut of 30%
Connecticut also has many small towns. The technique which Ribicoff used was to absorb the county functions into the State; county employees became state pensioners, which made the county people happy to cooperate. Once absorbed, consolidations or eliminations were made pragmatically. Living there, I can tell you that an entire level of taxation and duplication was removed. It also made government more accessible. One only had to contact one's town or state legislator; there was nothing in-between to obscure any issues.
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