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Homeowner-relief measure heads to Senate as 3 others go to Corzine

Tuesday, January 30, 2007 • BY DUNSTAN McNICHOL AND TOM HESTER • Star-Ledger Staff

The Assembly last night approved a $2 billion program of property tax credits that would mean a 20 percent reduction in many homeowners' tax bills and put new limits on increases in local government spending.

While sending that bill to the Senate for action next week, the Assembly gave final approval to three other measures designed to reduce the government spending that drives up property taxes. Those three bills now go to Gov. Jon Corzine.

One would establish an appointed state comptroller to monitor public spending; another would mandate pension forfeiture for public officials convicted of criminal acts, and the third would set up a special commission to identify towns and school districts ripe for merger.

The Assembly made last-minute changes to another pension reform bill, sending it back to the Senate with amendments that would outlaw dual-office holding for future elected officials and restrict the ability of professionals to run up huge public pensions for part-time government work.

"We are at the closing stages of a historic, first-of-its-kind, special session exclusively dedicated to property taxes," said Assembly Speaker Joseph Roberts.

Roberts (D-Camden) opened yesterday's meeting with a speech decrying critics who contend the Legislature is coming up short of achieving meaningful property tax reform. "This reform menu is nothing to apologize for. In fact it's historic," he said.

Republicans, although they supported most of the reform bills, declared the seven-month effort to rein in property taxes a failure.

"We just promised so much, and it's obvious we are going to give so little," said Assemblyman Joseph Malone (R-Burlington).

Gov. Jon Corzine suggested homeowners are likely to see rising tax bills again next year, even with enactment of the reform measures.

"In the first year I don't think it will be a great break from the 6 percent to 7 percent (increase in taxes every year), but then it should be moving down each year," the governor told reporters in Trenton early in the day.

Corzine promised a "line-by-line review" of the bills headed to his desk.

The tax credit program, the centerpiece of the Legislature's effort to provide tax relief this year, touched off a four-hour debate in the Assembly chambers that ran into the evening. By the time the bill (A1) was approved, 71-8, the rest of Statehouse was largely deserted and the gallery overlooking the lawmakers was empty.

As approved by the Assembly, the tax credit bill would dispense just over $2 billion to 1.9 million homeowners based on their incomes. About 1 million renters would share in a separate $252 million in rebates -- double the amount they currently collect from the state.

For most homeowners, the new tax credits would represent a sharp increase in benefits compared with the state's current property tax rebate program. It also takes in homeowners earning between $200,000 and $250,000 who are not eligible for the current program.

To keep local government spending in check, the bill would impose a 4 percent cap on the growth in any government's tax collections each year -- including, for the first time, limits on fire districts.

As approved yesterday, the bill would exempt about a fourth of a typical community's expenses from that cap -- including bond payments, exceptional increases in health care costs, scheduled growth in pension contributions, and revenues from new real estate. In addition, local officials and school boards could appeal to the state for cap waivers to accommodate expenses like rising fuel costs.

At his news conference, Corzine suggested that menu might be too broad.

"If the DCA grants waivers on every item listed, then we would have a cap that would not be useful," he said, referring to the state Department of Community Affairs.

Republican members of the Assembly called the proposed cap ineffective.

"This will result in increases in taxes at the municipal level in many municipalities," said John Rooney (R-Bergen), a former mayor of Northvale. "For municipalities that are doing a good job, this will turn around and bite them on the butt."

But bill co-sponsor John Burzichelli (D-Gloucester), who is also mayor of Paulsboro, said he is optimistic the new caps will prove effective.

"I think we're making progress," he said. "It's all a work in progress."

In amending the pension reform bill (A21), the Assembly resurrected a proposal to ban the practice of elected officials holding more than one office simultaneously.

As adopted, the new restriction would prohibit anyone elected to an office after July 1 from holding multiple offices. Currently, 18 of the Legislature's 120 members hold other elected posts; they would not be affected unless they sought other offices in the future.

Democrats rebuffed a motion by Republicans to have the ban take effect in 30 days.

"This legislation strikes at the entrenched core of abuses in the system," said Assemblyman Tom Giblin (D-Essex).

The Assembly also toughened a provision to stop lawyers, engineers and other professionals from tacking together pensions from multiple government jobs. An exception written in by the Senate for municipal assessors, inspectors, tax collectors and certain others was removed. The bill now must be reconsidered by the Senate.

Senators also are still weighing the fate of a bill (S10) that Roberts steered through the Assembly, which would impose a host of controls on local governments, including a provision to establish new county superintendents with veto power over local school budgets.

Bill offering $2B in tax credits clears Assembly

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