GOP vows tools to cut expenses, tighter tax caps

As Gov. Christie prepares for a budget debate likely to focus heavily on property taxes, he and fellow Republicans are devising steps to control the local levies with a combination of help and force.

On one hand, Christie and other top administration officials are promising to give mayors and school boards the "tools" to control labor costs and rein in expenses that contribute to New Jerseyans' $7,300-a-year average property tax bill.

On the other, Christie and at least one Republican lawmaker have argued for clamping down with a tighter cap on property tax increases.

The first approach aims to ease local costs. The other tries to tie officials' hands and bar them from sharply raising taxes.

With Christie already warning of cuts to municipal and school aid and contemplating a reduction in property tax rebate checks, the governor's allies say it will be crucial to repel the predictable criticism that his state budget-balancing trims will increase the local property tax burden.

"The problem is the people can't afford to pay and we can't afford to give [towns and schools] the money," said Assemblyman Joseph Malone (R., Burlington), the ranking Republican on the Assembly budget committee.

Christie, describing a dire budget picture with few popular choices available, has warned school districts to expect aid cuts of up to 15 percent and has told mayors, too, to expect less help from Trenton. Both steps could increase the pressure to cut services or raise property taxes, which fund schools and municipal governments.

But Malone has proposed a law that would freeze property taxes at their 2009 levels, at least while the state unemployment rate remains 7 percent or higher.

Less drastic versions of the idea could include lowering the state's 4 percent cap on property-tax increases or tightening the rule, which now includes waivers that sometimes let local governments exceed the limit. Christie has spoken at least since November of toughening the state property tax cap, once comparing the existing limit to "Swiss cheese" and arguing to close loopholes.

One exception that might be widely used in the new fiscal year allows taxes to exceed the cap to make up for losses of state aid. Nearly every community in the state is bracing for aid reductions.

Christie also is said to be considering slashing property tax rebates, a move that would surely amplify political attacks around property taxes.

The governor has urged local leaders to tighten their budgets instead of blaming Trenton for tax increases. He has called for a "mind-set change."

"The public wants everyone to participate in this exercise and to not just reflexively say, 'We must now raise property taxes,' " said Christie spokesman Michael Drewniak. "There will be tools provided to municipalities and school boards to deal with this."

A health-care proposal working its way through the Legislature would require local workers to pay 1.5 percent of their salaries toward their premiums, potentially saving local governments $314 million next fiscal year, according to the nonpartisan Office of Legislative Services. Christie has said he supports that idea and may want to go even further on health benefits to save more.

He also has raised the idea of changing arbitration rules that mayors say give workers an upper hand in negotiations and lead to uncontrollable cost increases.

Christie and his top aides have signaled that they also intend to give school boards more muscle in labor negotiations.

"If schools have more power at the bargaining table, they might be able to get settlements that are more realistic," said Lynne Strickland, executive director of the Garden State Coalition of Schools, which recently hosted a forum with Christie's acting education commissioner, Bret Schundler.

One step recommended in Christie's transition report on education is restoring the "last best offer" provision, which would give school boards the authority to force teachers to accept a district's final proposal when all other legal steps in negotiations have been exhausted. It's a tactic teachers say will lead to strikes, but school boards say will give them leverage.

"That's significant," Strickland said, though it would not help many districts in next fiscal year because it would apply to new contract negotiations.

"We like a lot of what [Schundler's] saying about the way business is done," said Frank Belluscio, spokesman for the New Jersey School Boards Association.

During a recent meeting with association members, Belluscio said Schundler spoke in favor of reducing the time-consuming reports districts have to do.

Still, Strickland noted that districts are bracing for the coming cuts.

"We want to be realistic; we don't want to be seen as whiners . . . yet there are going to be some crushing blows that are dealt here and some places will have it more than others," Strickland said.

Bill Dressel, executive director of the New Jersey League of Municipalities, said talk of tightening the tax cap must be paired with fewer mandates from Trenton. He said reforms to the state's arbitration rules and pension system were needed to truly control local costs and taxes.

"I've never met an elected official in New Jersey that relished the idea of increasing property taxes and reducing services," Dressel said. Referring to Malone's proposal, he added, "to suggest that we need a state law to [control taxes] without really getting at the core issues of why property taxes are rising I think skirts the issue. . . . It sounds good, it's a good sound bite, but it's not responsible."

Dressel said that if a tax freeze were enacted without steps to control local costs, quality-of-life services would be at risk and "people on the lower end of the socio-economic ladder are going to be the ones that take it on the chin the most."