NJ gov. wants lawmakers to reduce property tax cap, Senate President Stephen Sweeney

((AP Photo/Curt Hudson))

June 29, 2010 8:12:35 AM PDT
State lawmakers have sent Gov. Chris Christie a plan to cap towns' annual property tax increases at 2.9 percent - a higher ceiling with more exemptions than he wants.

The Republican governor responded Tuesday morning by ordering a special legislative session to force lawmakers to consider a more stringent plan.

Christie has not said what he will do with the measure passed Monday by both chambers of the Legislature. He can sign it, send it back with recommended changes or allow it to become law by doing nothing for 45 days.

New Jersey's property taxes are the highest in the nation, averaging $7,300 per homeowner. Annual tax increases are currently capped at 4 percent.

The freshman governor's plan would ban towns from raising property tax collections by 2.5 percent or more unless approved by two-thirds of voters.

It also would write the cap into the Constitution, meaning it would require voter approval. Christie wants the question placed on the ballot in November, but Assembly Majority Leader Joe Cryan, of Union, insisted it wouldn't be.

"He can't force us and he won't force us, because we won't be voting on anything," Cryan said.

The governor can force members of the Legislature to convene a special session but cannot compel them to vote.

Republican Sen. Kevin O'Toole, of Wayne, said there's a "dire need out there" to have the 2.5 percent cap for the municipalities.

"If we are going to come back, we better be looking at bills, passing bills and doing something to bring some relief to the overburdened taxpayers," he said.

The cap proposed by state Senate President Stephen Sweeney and approved by both houses of the Legislature reduces the maximum annual property tax increase to 2.9 percent but allows exceptions for inflation and rising health care premiums.

The measure also allows towns that keep increases below the cap to bank the difference for future use.

Christie has been campaigning around the state for months to push his plan. He and fellow Republicans argue that an absolute cap is needed to rein in New Jersey's property taxes, which he says are driving homeowners and businesses from the state.

Democrats, meanwhile, argue that a constitutional amendment would be too difficult to change if something goes wrong. They say tax increases have fallen to an average of 3.3 percent since the 4 percent cap was instituted.

Sweeney said the governor's tax cap, modeled after one in Massachusetts, wouldn't work the same because the two states are different economically.

"Towns were pumped with cash and the economy was great," Sweeney said.