N.J. tax relief seen as unfinished business

TRENTON - As Gov. Corzine sees it, New Jersey's highest-in-the-nation property taxes took a hard punch this year, but they weren't knocked out.

"We are making progress," said Corzine, who made property-tax reduction a hallmark of his Democratic gubernatorial campaign two years ago. "We are not where we want to be."

Corzine and legislators spent much of 2007 focusing on reducing property taxes, which average $6,330 in New Jersey - double the national figure. Their actions included:

Increasing property-tax rebates by about $700, to an average $1,051.

Capping county, local and school property-tax increases at 4 percent, though tax increases can exceed the limit because certain costs are exempt from the cap.

Revising and reducing health and retirement benefits for state and local public workers to cut the amount that state and local governments pay for the policies.

Creating county school superintendents with power to slice local school spending that drives up property taxes.

Creating a commission to ask voters to merge towns to save money.

Republicans question whether it was enough.

"Democrats may wish to pat each other on the back for having a slightly less dramatic increase in tax bills," said Assembly Minority Leader Alex DeCroce (R., Morris).

Corzine said time would show other moves helped control property taxes, which pay for most local and county government and school operations.

Property taxes are a top concern of New Jersey residents. As a candidate in 2005, Corzine promised to increase rebate checks 10 percent annually. He didn't do so in 2006, but exceeded that pledge this year.

"The benefits can't be instantly realized," he said. "No one should have ever expected that, but the reforms are taking place."

John Hendrickson of Red Bank is among the unconvinced. The registered Republican said he wanted local government funded with state income taxes, not property taxes.

"Other than the cap on spending, I am unable to think of any details of the governor's so-called plan," Hendrickson said.

"Not that there were no other things done," he said. "Rather, it is just that I cannot think of anything that constitutes property-tax reform, and this one thing I do recall only paves the way for higher, not lower, taxes."

In a survey by the New Jersey State League of Municipalities this year, 86 percent of the mayors who responded said they still wanted to ask voters to authorize a constitutional convention staffed by citizens to tackle property taxes.

Corzine said early evidence indicated that the cap worked, with school-tax increases held to 4.4 percent, compared with the 7 percent increases of recent years.

He predicted a further dip once his school-funding plan was implemented and districts received increased state aid.

Republicans question whether Corzine's plan would help suburban schools that haven't seen increases in state aid for most of the last six years.

"The result will be even higher property taxes for suburban homeowners, seniors and working families," said Assemblywoman Charlotte Vandervalk (R., Bergen).

Corzine said he realized that most residents didn't consider rebate checks reliable relief.

The checks don't mean lower property-tax bills, and amounts have varied wildly year to year, though the Democratic plan calls for annually sending checks worth 20 percent of the property taxes owed by most homeowners.

If rebate checks "are repeated consistently, they're not a gimmick," Corzine said.

DeCroce called the plan "no more than a drop in the bucket for most families."

"Not only do we need to stop these dramatic increases in property taxes, we need to provide substantial and permanent relief to homeowners," he said. "Otherwise, families will continue to flee this state."

Corzine said his administration would continue to put a "tremendous amount of day-to-day execution" toward controlling property taxes.

"The person who gets up in the morning and drives to work and has to pay the property-tax bill, I mean, 4.4 percent doesn't sound great to them. It's still a hike on top of already the highest levels in the country," Corzine said. "I'm on their side. We've got to work to get these things down."