The property tax cut: What's in it for you?

Average reduction would be $1,051 if adopted, but loose ends remain

02/12/07  (AP)
 
TRENTON — New Jersey is putting the finishing touches on its six-month bid to slice America's highest property taxes, but what does this all mean for you and your family?

Here's a rundown of where it goes from here:

Q: What do we get out of this?

A: The property tax cut plan approved by the Legislature and awaiting Gov. Corzine's signature would average $1,051 for New Jersey homeowners.

Households that earn up to $100,000 will get a 20 percent cut, up to $150,000 will get a 15 percent cut, and up to $250,000 will get a 10 percent cut.

Q: How is this being paid for?

A: With money that went to property tax rebate checks and from last year's sales tax increase.

Q: At least property tax increases will be capped at 4 percent, right?

A: That's the goal, but Corzine said it could take a few years for the cap to begin working. Also, the caps have exemptions for things like state aid cuts, health care costs, debt and pension contributions. So, it's not a strict limit.

Q: Any other ways around the cap?

A: Schools and local governments can ask the state and voters for approval to exceed the cap, so governors will have a lot to do with approvals to run over the cap. But the plan requires 60 percent of voters to approve exceeding the cap, which will make voter approval difficult.

Q: Has the state finally controlled the costs of government worker benefits?

A: Not yet. The Assembly and Senate are bickering over a bill to reform taxpayer-paid benefits for elected and appointed officials. Corzine insisted on trying to negotiate benefit changes with state workers.

Q: Has the Legislature finally made tough choices to force local governments to merge and share services to save money?

A: New Jersey has 21 counties, 566 municipalities, 616 school districts, and 186 fire districts, all with their own bureaucracies that many argue contribute to high property taxes.

The Legislature has approved a special 22-member commission to ask voters to merge municipalities, but voters have shown no desire to do so. The panel's first report is due within two years of it being created.

Q: What about merging schools?

A: There's still a proposal alive to create 21 county school superintendents with authority over local school spending. The superintendents would have three years to develop a plan to consolidate schools and hold a referendum on the plan.

Q: Those county school chiefs will be education experts, right?

A: The law, which still needs final Assembly approval, will require superintendents to be state residents for at least three years and have "appropriate" qualifications. However, senators would be able to individually block and approve nominations, so politics will be in play.