Consolidation essential for property tax relief

Appeared in the Asbury Park Press on 07/25/06

By Joan Verplanck, President, NJ Chamber of Commerce

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. As July turns into August, 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 happen only when there is consolidation of some of the more than 1,000 layers of government that 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, Gov. Corzine won about $600 million to help balance the budget through the imposition of another cent on the sales tax, half of which would offset 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-rising 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 bogeyman that everyone points to when saying that consolidations will never happen. I don't care what community's name is on the side of the firetruck 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 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 $2,000 a year in property tax to be sure that the firetruck has your community's name on it?

Joan Verplanck can be contacted at joan@njchamber.com.

July 2006