GOP calls tax aid unconstitutional AG examines accusation but Corzine and Democrats dismiss objections as politics Wednesday, January 31, 2007 • BY DUNSTAN McNICHOL • Star-Ledger Staff The state Attorney General's Office is reviewing Republican claims that a $2 billion property tax relief program making its way through the Legislature is unconstitutional, even as Democrats dismissed the claims as groundless and political. "If we don't get this fixed now, I guarantee somebody's going to file a lawsuit and the whole thing's going to go down," Assembly Minority Leader Alex DeCroce (R- Morris) said at a news conference yesterday. "If I were the people of New Jersey, I wouldn't be spending the checks yet." Gov. Jon Corzine and other Democrats quickly dismissed the Republican claims. "We smell a rat," said Corzine's spokesman, Anthony Coley. "We're not exactly sure what some of our Republican friends are up to, but one thing's for sure: New Jersey's middle- and moderate-income families need and deserve lasting property tax relief and reform; this political maneuver is a roadblock to that." Republicans claim a property tax relief bill that the Assembly approved 71-8 Monday is flawed be cause it would offer tax credits that vary based on a homeowner's in come. That, they said, runs afoul of a provision in the state constitution that requires all property to be taxed based solely on its value, not on the income or personal characteristics of its owner. The "uniformity clause," they maintain, prevents policymakers from adjusting tax rates to discriminate against unpopular groups. To clear up the problem, Republicans want Democrats to offer uniform levels of relief to all homeowners regardless of income -- or to seek voter approval for a constitutional amendment specifically authorizing a graduated tax credit program. Democrats who sponsored the relief bill (A1) say the restrictions the Republicans cite are overrid den by other constitutional provisions that allow lawmakers to set up tax relief programs. "The constitution couldn't be more clear or concise in supporting this relief initiative," said Assemblyman John Burzichelli (D- Gloucester), a sponsor of the bill. "If the Republicans and their lawyers want to continue along this path, they do so at their own risk because the state constitution and the residents of New Jersey are in our corner." Republicans contend the state's existing rebate program, which offers varying levels of benefits de pending on income, is also unconstitutional. "That the state has acted unconstitutionally for the past three years does not, however, sanctify its actions," attorney Mark Sheridan said in a memo prepared for the Republicans. "Regrettably, this was not caught sooner." The Attorney General's Office is reviewing the issue, said spokesman David Wald. In the meantime, the state Senate yesterday introduced legislation (S20) identical to the tax relief bill the Assembly approved Monday. The Senate bill is scheduled for consideration next Monday. The tax credits would provide state funds to offset a portion of most homeowners' property tax bills. The credits would equal 20 percent of this year's property tax bill for homeowners with gross in comes up to $100,000; 15 percent for homeowners earning from $100,001 to $150,000, and 10 percent for homeowners earning between $150,001 and $250,000. Senior citizens, who can receive up to $1,200 under the existing re bate program, would continue to get rebate checks, either for their current amount or the amount of the new credit, whichever is larger. The legislation also imposes a limit of 4 percent on the amount any local government's tax collec tions can grow each year, but includes exemptions for revenue from new real estate developments, certain scheduled pension increases and costs. The $2 billion credit and cap program is the centerpiece of a wide-ranging menu of local tax reform bills that lawmakers have been working on since July. Senate President Richard Codey (D-Essex) said he saw little reason to postpone Monday's consideration of S20 in the face of the Republican concerns. "Let them explain that to the taxpayers -- that they want to hold up relief," he said. Dunstan McNichol may be reached at (609) 989-0341 or dmcnichol@starledger.com. © 2006 The Star-Ledger. Used by NJ.com with permission.