Gov. Chris Christie kicked off his statewide campaign for his controversial property tax reform proposal on Monday in Hoboken. Billed by the governor as the “mayor’s tool kit,” Christie expects towns to keep their property tax increases to 2.5 percent each year by changing how they can negotiate contracts with their workers and teachers.
Since taking office on Jan. 1, Christie has cut state aid to schools and to towns, forcing both entities to fill holes in their own budgets by either laying off workers or increasing taxes. Christie is trying to push towns to find other solutions.
Monday’s “town hall” meeting was the first in a series of similar events Christie will hold throughout the state to build support for his plan, which would have to be voted on by the state legislature in early summer.
“This is not a Republican issue; this is not a Democrat issue. This is a state issue that affects us all,” said Hoboken Mayor Dawn Zimmer, a Democrat, before introducing the governor on Monday.
“They sent me an outline [of the proposal], but it wasn’t detailed.” – Secaucus Mayor Michael Gonnelli.
“This is something that’s nonpartisan and really should unite every resident of this state,” Christie commented, adding, “We have working people being pushed out of their homes. There are people who can’t afford to stay in the state they grew up in because, even if they can afford their mortgage, they discover they can’t afford their taxes.”
The governor then offered a 30-minute overview of his plan and fielded questions from audience members, a group largely comprised of local elected officials and tax reform advocates.
The proposal, first outlined last month when Christie introduced his proposed 2010 state budget to the legislature, is already facing opposition from unions – most notably teachers’ unions – who say that tax relief will come at the expense of public service employees.
With New Jersey facing what Christie says is a $10 billion budget deficit and property taxes that have increased by 70 percent over the last decade, Christie has proposed 33 pieces of legislation to reign in public spending.
Central to Christie’s plan is a state Constitutional Amendment that would cap property tax increases at 2.5 percent a year. Any property tax increase that exceeded 2.5 percent would have to be approved by the voters of that town.
“Public spending must be brought under control,” Christie said. “And the only way to do it and to have a lasting impact on taxes, and to bring taxes down, is to implement a cap that forces municipalities to cut waste and live within their means.”
The governor’s proposal – which would affect municipal, county, and school budgets – is modeled after a similar constitutional amendment that passed in Massachusetts in 1982.
A key provision in Christie’s tax reform package is that labor arbitrators – when helping with negotiations between cities and unions – would be required to weigh the impact wage and benefits packages would have on property taxes and the 2.5 levy cap. Thus, unions would have to consider more strongly than before what their benefits packages and raises would cost the towns. The proposal does not specifically require that wage increases be held to 2.5 percent. As spokesman for Christie explained that a municipality could offer higher wages to unions, then make cuts elsewhere in the budget to stay under the levy cap. And any spending that threatened to push property taxes above the cap would have to be approved by voters.
Municipalities would also be able to opt out of state civil service laws, although it’s unclear based on materials released so far by the governor’s office how he plans to accomplish this.
“About 82 percent of property tax increases stem from labor costs associated with wage increases, health care costs, and pension benefits,” Christie said. “If we’re ever going to get a handle on rising property taxes, we must deal with labor costs.”
County mayors want ‘more details’
Christie’s staff began reaching out to local mayors throughout Hudson County a few weeks ago to build local support for the governor’s tax reform plan, but several mayors avoided or could not attend Monday’s event (see Al Sullivan’s political column for more).
Regional Director Frank Luna, Christie’s point person for Northern New Jersey, met with local mayors to lobby for their support.
Only two of Hudson County’s 12 mayors – Zimmer and Harrison Mayor Raymond McDonough – agreed to publicly support Christie’s package. Other mayors said last week they’d like to see more details of the plan before endorsing or opposing it.
“The governor was advancing his legislative initiative, including the 2.5 percent cap on taxes, a 2.5 percent cap on spending, and rolling that over to binding arbitration where there would be a 2.5 percent cap on salary increases for our public employee unions,” said Jersey City Mayor Jerramiah Healy in a written statement last week. “It sounds like it is a good thing, but the state has to also abide by these caps and there is a long way to go to see whether this can be achieved.”
Healy, the chairman of the Hudson County Democratic Organization, was among those at the event Monday.
Jersey City is currently facing a $42 million budget deficit, and property taxes went up 25 percent in the first quarter of this year.
But even in municipalities with more stable tax rates, local leaders said they wanted more information about the governor’s proposal.
“They sent me an outline [of the proposal], but it wasn’t detailed,” said Secaucus Mayor Michael Gonnelli. “I really need more time to digest it.”
Secaucus’ Town Administrator David Drumeler, who attended Monday’s event on Gonnelli’s behalf, thought Christie’s proposal sounded interesting, but he wondered how municipalities would move toward a tax cap model when towns have already signed labor contracts that didn’t take a 2.5 percent cap into account when they were negotiated. Some of those contracts will not be up for another negotiation for several years.
A spokesman for the governor said last week that Christie “will not ask presently negotiated contracts to be broken to accomplish this.”
Sacco: He’s distracting us from the negative
Democratic North Bergen Mayor and State. Sen. Nicholas Sacco, who was not present Monday, wants to shift the public debate back to Christie’s cuts. He said that Christie is trying to divert attention from money he’s taken away from schools and urban areas.
“The governor’s proposals will be given all due consideration,” he said. “But this doesn’t change my opposition to his budget, which cuts over a billion dollars out of education and mass transit funding, is causing mass layoffs, possibly eliminating the Urban Enterprise Zone program [to help urban business districts], and taking Homestead rebate checks away from senior citizens while giving the richest people in the state a big tax cut.”
He added, “I am completely opposed to the governor’s budget, and that’s what we should be talking about now, not this package of legislative proposals that are an attempt to divert attention away from the budget cuts.”
E-mail E. Assata Wright at firstname.lastname@example.org.