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Corzine, Christie in a rut on property taxes

New Jersey's sky-high property taxes are an old problem that has produced old answers from the two major-party candidates in this year's governor's race.

New Jersey's sky-high property taxes are an old problem that has produced old answers from the two major-party candidates in this year's governor's race.

With the average New Jersey property tax bill now topping $7,000, Republican Christopher J. Christie and Democratic Gov. Corzine have pointed to increased property-tax rebates and more encouragement for local government consolidation as key initiatives to relieve property-tax burdens.

Both ideas have been tried, with little lasting impact. Rebates have proved an inconsistent salve, soaring in boom times and election years and falling off later.

Consolidation has been discussed as a promising theory for decades, but with few major success stories in practice. Meanwhile, the average property tax bill has grown by 71 percent since 1998 and public opinion polls consistently show it as voters' top concern.

Neither candidate has proposed an extensive new plan on the issue, although Corzine argues that he has already set the stage for relief with increased state aid for schools, a more balanced system of distributing that money, and a 4 percent cap on annual property-tax increases. The average property-tax increase slowed to 3.7 percent in 2008, the lowest increase in nearly a decade.

Though Corzine has not offered any new prescriptions - the section of his Web site listing second-term plans doesn't mention property taxes - he said those steps, along with more effort to merge local governments, would continue to eat away at the problem.

"We've got programs to get at the root causes," he said.

But Christie said Corzine had already failed to deliver on his main campaign promise: a 40 percent rebate increase. "Nobody in the state believes he's done anything to help property taxes and the reason they don't believe him is because of the trail of broken promises he's left," Christie said.

Corzine has fired back, criticizing Christie for pledging to increase rebates without saying by how much or when. Corzine said the Republican's budget won't add up if he intends to both cut taxes and increase the rebates.

"Making tough decisions in a tough environment is what being a governor is about," Corzine said in the first gubernatorial debate. "No plan is not what being a governor is about."

So far the most detailed new proposal has come from independent candidate Chris Daggett, who called for 25 percent property-tax credits, up to $2,500, for all homeowners. He would pay for the credits by expanding the state sales tax to cover more services and eliminating rebates and other relief programs.

"My opponents talk about nothing. They never get into details," Daggett said when he presented his idea. "I think my plan compares favorably, but virtually anything would compare favorably to what they've put forward so far."

He called rebates a "sham" that takes tax money, "massages" it, and sends some back to residents.

Over the years there have been several promises of bigger checks, funded by higher income or sales taxes, but the program was later curtailed.

In separate interviews, Corzine and Christie each praised rebates, saying they put money directly into homeowners' pockets until a more lasting answer, such as reducing the levels of local government, can be found.

Both criticized Daggett's plan for raising sales taxes by roughly $4 billion. Daggett has said his system would provide a fairer balance of taxes.

Corzine said he would like to restore rebates to the record levels he set in 2007 but he didn't commit to reaching that amount and acknowledged that other priorities, such as education and pension funding, would be competing for state's funding.

He has also said he would like to extend the "senior freeze" program, which reimburses eligible senior citizens for property-tax increases, to other low-income homeowners.

Corzine said he hoped to continue with a municipal and school district consolidation push that began in 2007.

Christie isn't making any big promises, other than to say that he will follow through on those issues - such as property-tax relief - that he intends to make a priority. He said rebate amounts in his administration would depend on economic conditions.

"It was wrong for [Corzine] to make the promise of a specific amount four years ago, he did it purely to pander to get elected," Christie said. "And if you're looking for someone who is going to pander, I'm not your candidate."

The 3.7 percent average statewide property-tax increase in 2008 amounted to an extra $250 on the average bill. Still, that was less than the $400 or so being added annually before Corzine took office.

The state has not compiled data yet for 2009 bills. Corzine allowed towns to skip some pension payments this year to cope with the recession and keep costs down, but Christie said paying back those amounts would lead to big future hikes.

The average bill statewide was $6,022 in 2005, before Corzine took office.

Corzine's pledge to boost tax rebates 40 percent over four years fell by the wayside as he grappled with budget deficits and a recession.

The one exception was in 2007, when the rebate boost was paid for with money from a sales-tax increase the previous year. Republican critics predicted that the beefed-up tax relief would last through that year's legislative elections and no longer. They were right.

The bottom line is that Corzine inherited a budget that spent $1.1 billion on rebates, and his last plan put about the same amount toward the checks. This year, about 1.1 million homeowners and senior-citizen tenants will get checks, compared with 2.4 million before Corzine came to Trenton, including tenants of all ages. But those who get rebates will generally get more.

At the lower ends of the income scale, Corzine has more than doubled the amount going to homeowners under age 65.

But homeowners in that age group get rebates only if they earn $75,000 or less. Before Corzine's first year, the cutoff was $200,000.

Christie said the cap is too low.

"Those people who are making more than $75,000 a year are all of a sudden rich in New Jersey? I think we all know that's not the case," Christie said.

Corzine says he gave out $7 billion in direct property-tax relief in his four years in office. He also argues that he has made progress in other areas, many springing from his call to "make history" at a 2007 special legislative session on property taxes.

With the help of federal stimulus funding, direct aid to school districts is up by nearly $1 billion, or 13 percent, from the budget Corzine inherited, and the money has been spread around to more schools due to the governor's new school-funding system. In 2008 some districts got as much as a 20 percent aid increase. This year, the aid bumps were as large as 5 percent.

"That's a major, major shift," Corzine said.

Spreading out the money to schools helps check tax growth because local school taxes make up the bulk of property-tax bills.

Newly empowered executive county school superintendents also have taken aim at school waste, paring $361 million from school budgets in this academic year alone, according to the Department of Education.

Other reforms touted after the 2007 session have moved slowly. Proposals to make every school district a K-12 district are due next year. Another commission's ideas for municipal consolidation and service sharing are expected in December, Corzine said.

The most tangible step has been the elimination of 13 nonoperating school districts that had no schools.

Christie proposed offering grants to study consolidation and shared services. He said towns that accepted grants and found ways to save would have to pay the money back if they didn't take up the idea, a penalty that would encourage leaders to use the efficiencies.

Though consolidations and mergers are often discussed as a way to cut the costs of local government and property taxes, they have rarely been used.

Corzine said his tax cap would put pressure on towns to find ways to save. Christie said he would use the bully pulpit to encourage mergers.

But both would leave the final decisions up to local voters, who have proved reluctant to accept mergers.

With the plans laid out so far, William Dressel, executive director of the New Jersey League of Municipalities, said he doesn't expect much help regardless of who wins in November.

Dressel said real solutions on property taxes would require bipartisan support for politically risky ideas and taking on labor unions.

If the answers were easy, he said, "well, they would have been done 35 years ago."