Reactions to state address -- Corzine's take on property tax reform affects Hudson legislators

Ricardo Kaulessar - Hudson Reporter -- 01/12/2007

It wasn't a surprise that Gov. Jon Corzine would be tackling the issue of property tax reform in his State of the State address on Tuesday in Trenton.

But the Hoboken resident still managed to invoke a sense of alarm in some Hudson County legislators with his ideas.

The reform proposal for the state's property tax system would entail in the short term a break on residents' property taxes of up to 20 percent for wage earners of $100,000 or less, followed by smaller reductions for those earning between $100,000 and $250,000.

But to find money for the credits on the property taxes, Corzine is pursuing measures such as the creation of a state comptroller to oversee overspending by local governments and to find savings; a 4 percent cap on annual property tax increases; consolidating and sharing government services; and concessions by public employees on health benefits and pensions.

State legislators were to have come to an agreement on the reform by a deadline of Dec. 31, but now will have to do so before the legislative session ends in the State House on June 30.

"Today, right now, there is one challenge we must meet," said Corzine. "The time to act on property-tax relief and reform is now."

If reform is not struck this year, homeowners across could face a record increase of $1.4 billion or more for property taxes across the state as it did last year, according to a Star-Ledger analysis.

State Assemblyman Louis Manzo represents New Jersey's 31st District, which encompasses much of Bayonne and part of his hometown of Jersey City, and finds fault with the reform initiative.

"I think we have started on the wrong path," said Manzo. "The failure to use another source of revenue other than the income tax will be a disastrous path for New Jersey."

A very taxing situation

The pain of property taxes can be felt in every one of New Jersey's 566 municipalities including in Hudson County. In Jersey City, Mayor Jerramiah Healy faced a near-revolt from residents after his city's taxes went up 20 percent last year.

An analysis of property taxes done by the Star-Ledger this month found that Bayonne and Kearny had the highest property taxes in Hudson County in 2006, with $7,910 and $7,101 per year respectively. Jersey City residents faced an average bill of $4,794.

Manzo said while he agrees that there needs to be tax reform, he believes Corzine should go further with increasing income taxes with a progressive income tax when pursuing the lowing property taxes. Manzo's disagreement comes out of the ideas proposed in his SMART Bill that he has put together for the past three years, whereby funding for school districts would come from the money gained in the income tax increases rather than property tax increases.

Manzo said Corzine's idea of placing cap on education spending is a bad idea to fund revenues to help give tax credits to 1.9 million New Jersey homeowners. Manzo went on to say it is also damaging to the state's school system, particularly for poorer school districts such as Jersey City and Paterson.

"We learn that 60 percent of education funding comes from municipal taxes. That's 20 percent over the national average," said Manzo. "His solution is to cut [education spending] with one of the consequences being public education taking a beating."

When asked if Corzine should be sensitive to issues of putting a cap on education spending, especially for school districts in Hudson County, Manzo showed his displeasure openly.

"He's a transplant," said Manzo with a laugh. "He's doesn't know Hudson County because you wouldn't hurt educational opportunities for the poor."

However, other Hudson County legislators were on board with Corzine's address and ideas.

State Assemblywoman Joan Quigley (D-Hudson) said she supports the property tax reform bill but welcomes discussion, and is hesitant to support Manzo's SMART Bill.

"Taxing the richest is a problem as more and more higher income earners are the most mobile and having been leaving New Jersey in droves in recent years," said Quigley.

Quigley said she believes any disagreements over the property tax reform will be settled at least by Feb. 27 when Corzine unveils the state's budget.

Recently installed West New York mayor and Hudson County Freeholder Sal Vega said after the address he agreed with the tax reform.

"The governor is right on track. We are all for tax relief," said Vega. "I think we have to make sure what the caps are going to be."

Quote:

Income and sales taxes are state and property taxes are local.

Anyone out there know much about this?

So what is the upshot? What will happen in JC and other places in New Jersey?

Where will the city raise taxes in the future? Is it true that only the state can raise income tax or sales tax?

Ranking Average tax bill for local, school and county services
For towns with
at least: 500 homeowners Ranking Town
rank 1 of 20 Millburn (Essex) $16,511
rank 2 of 20 Mountain Lakes (Morris) $16,291
rank 3 of 20 Essex Fells (Essex) $15,315
rank 4 of 20 Rumson (Monmouth) $14,964
rank 5 of 20 Glen Ridge (Essex) $14,867
rank 6 of 20 Tenafly (Bergen) $14,412
rank 7 of 20 Mendham Twp. (Morris) $14,246
rank 8 of 20 Alpine (Bergen) $14,201
rank 9 of 20 Princeton Twp. (Mercer) $13,967
rank 10 of 20 Montclair (Essex) $13,547
rank 11 of 20 Mantoloking (Ocean) $13,440
rank 12 of 20 Demarest (Bergen) $13,286
rank 13 of 20 Franklin Lakes (Bergen) $13,051
rank 14 of 20 Upper Saddle River (Bergen) $13,000
rank 15 of 20 South Orange (Essex) $12,877
rank 16 of 20 Princeton Borough (Mercer) $12,857
rank 17 of 20 Saddle River (Bergen) $12,730
rank 18 of 20 Ridgewood Village (Bergen) $12,567
rank 19 of 20 Summit (Union) $12,566
rank 20 of 20 Haworth (Bergen) $12,471

This was the only per household ranking for 2006 that I could find.
Source: NJ.com

Kearny has the highest property tax in Hudson County? Which town has the highest in the state?

Mayor Healy: Corzine's plan "spelled terrible financial problems for Jersey City"

MAD-CAP IDEA?
Hudson mayor raps gov's property tax relief plan
Thursday, January 11, 2007
By KEN THORBOURNE
JOURNAL STAFF WRITER

The mayor of the town in Hudson County with the highest property taxes blasted Gov. Jon Corzine's proposal to cut taxes for the average property taxpayer while simultaneously capping how much municipalities can raise them.

"If it is a pure cap, it won't work," said Mayor Alberto Santos of Kearny, where the average taxpayer pays a county-leading $7,910 a year in taxes.

"On the municipal expense side there are just too many cost drivers that are not in our control," Santos added.

According to the Star-Ledger, the average Kearny property taxpayer shells out $7,400 a year in taxes. But Kearny Tax Assessor Sharon Curran said yesterday the figure is actually even higher than that - $7,910 a year for every $100,000 of assessed value.

Santos said he would love to limit municipal tax hikes to 4 percent a year, as Corzine proposed Tuesday in his State of the State address.

But that's not realistic, given the fixed costs that keep rising, he said.

Those expenses include sewage treatment fees, garbage disposal costs, health and pension rates, and raises imposed on the town through labor arbitration procedures - all rising at double-digit rates each year, he said.

"If you say I can't raise taxes by more than 4 percent, then I have to impose user fees," Santos said. "Either I do that or I cut back on personnel. But these employees perform a vital service.

"The real solution is to address the cost drivers we have to pay."

During his speech, Corzine outlined a plan to provide tax credits to 1.9 million New Jersey homeowners with annual incomes of less than $250,000. Treasury Department officials pegged the givebacks as ranging from $820 to $1,080.

Jersey City Mayor Jerramiah Healy said Corzine's plan "spelled terrible financial problems for Jersey City and other urban areas," for reasons similar to those Santos cited. A Jersey City property owner with a home assessed at $125,000 pays roughly $6,500 a year in property taxes, officials said.

Through a spokesman, state Sen. and Bayonne Mayor Joseph V. Doria Jr. said he's in favor of the 4 percent cap on municipal tax hikes.

Based on an average property assessed value of $133,000, the average Bayonne property owner pays $6,983 in taxes. Hoboken Mayor David Roberts didn't return phone calls for comment.