New Jersey Assembly Passes Real-Estate Tax Cap in Compromise With Christie
New Jersey Governor Chris Christie speaks during an interview in New York. Photographer: Jin Lee/Bloomberg
Assembly lawmakers in New Jersey, the state with the highest property taxes in the U.S., approved a plan endorsed by Governor Chris Christie to cap annual increases in real-estate levies at 2 percent.
The measure, which cleared the Democratic-controlled house 73-4 today, would lower the current restriction from 4 percent and reduce exceptions. The taxes are the prime source of funding for cities, schools and counties.
New Jersey property taxes climbed 72 percent from 1999 to 2009, to an average of $7,281. Taxpayer anger helped Christie become the first Republican elected governor in the state since 1997. Checking the increases will make the state more affordable and attractive to businesses and residents, he has said.
“New Jersey families can finally look forward to the kind of real, long-term property-tax relief that Trenton has failed to deliver for decades,” Christie said in a statement. “A hard cap of 2 percent with limited exceptions that puts final authority to exceed the cap in the hands of the people is the substantial and sustainable reform New Jersey needs.”
Christie, 47, who took office in January, will sign the bill tomorrow, said his spokesman, Michael Drewniak.
The governor had pushed for a 2.5 percent ceiling to be written into the state constitution, with exemptions only for debt service or when approved by referendum. Democrats sought a statutory cap with more variances, and the Legislature approved a ceiling of 2.9 percent last month.
Compromise Agreement
The 2 percent limit was a compromise announced July 3 by Christie and Senate President Stephen Sweeney, a Democrat from West Deptford. The Senate passed the measure July 8.
Under the new limit, towns may boost taxes beyond the cap to meet rising health-insurance costs, pension expenses, bond payments or to cope with a natural disaster. Communities would also be able to exceed the cap through referendum.
“It will take a recalibration of what services people expect their government to provide,” said Assemblyman John Burzichelli, a Democrat who sponsored the bill. He’s also mayor of Paulsboro, located across the Delaware River from Philadelphia.
The agreement followed Christie’s call for a special session of the Legislature to consider his constitutional proposal. He summoned lawmakers back from their summer recess following passage of his $29.4 billion budget for the fiscal year that started July 1. Democrats control the Assembly 47-33 and all Republicans in the chamber supported the legislation.
‘Closed-Door Deal’
Assembly Speaker Sheila Oliver, who called the compromise a “closed-door deal” between Sweeney and Christie, said she’s seeking more exemptions for towns to cope with lost state aid, rising special-education costs and uncollected taxes.
“You’re going to see a diminution of the operations of local government,” Oliver, a Democrat from East Orange, said following the vote. “This is an imperfect bill. But least it opened up the conversation and put a focus on property taxes in this state.”
Property taxes increased an average of 3.3 percent last year, the lowest in a decade as towns dealt with a 4 percent limit enacted in 2007 by Governor Jon Corzine, the Democrat ousted by Christie in November. That legislation contained 14 exemptions, prompting Christie to call it a “Swiss cheese” cap.
To contact the reporter on this story: Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net
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