Corzine property tax plan raises questions

January 30, 2008 8:44:40 AM PST
Will last year's lofty property tax rebate checks be a one-year wonder, as critics alleged? No one knows until Gov. Jon S. Corzine signs the state budget for next fiscal year.

But the Democratic governor is indicating rebates could be sliced when he freezes spending in the coming state budget, a move he said would mean $2.5 billion in cuts as he seeks approval to increase tolls for years to come to pay debt and fund transportation.

When asked Tuesday whether rebates could be cut, Corzine didn't answer directly, but hinted it won't be pretty.

"We will have to do those things that leave us with spending no higher than it is this year," Corzine said. "And while we hear much complaint about the pain that is associated with this particular overall plan, I think the focus will very quickly shift from toll hikes in 2022 to budget cuts in 2009."

This came after he told mayors at a recent Statehouse forum that trouble looms if state finances are fixed.

"If you don't solve these problems, property tax relief will not be able to be accomplished," Corzine said.

Republicans aren't surprised the rebates may be cut. They spent much of last year alleging the higher checks were designed to help Democrats retain their Assembly and Senate majorities in November's election. Democrats did just that.

"They clearly were crafted as an election-year gimmick," said Senate Minority Leader Tom Kean Jr. "It wouldn't surprise me at all."

Democratic legislators are waiting for Corzine to present his budget plan on Feb. 26, but aren't thrilled by signs rebates meant to help homeowners with America's highest property taxes could be cut.

"Anything less is a tax increase," said Assemblyman John Burzicheilli, D-Gloucester, who first proposed the expanded rebates.

Democrats increased property tax rebate checks by about $700 last year, to $1,051 per homeowner. For most homeowners, that equated to about 20 percent of their property taxes.

"I don't know how you talk about restructuring the state's finances and at the same time make part of that restructuring eliminating something that would cause a property tax increase," said Burzichelli. "I don't know how you sell both of those things."

Corzine plans to freeze spending as part of a larger plan to restructure state finances. That proposal involves significant highway toll increases to pay at least half of $32 billion in state and fund transportation projects for 75 years.

To do so, he wants to increase tolls 50 percent in 2010, 2014, 2018 and 2022. Those increases would include inflation adjustments and, after 2022, tolls would increase every four years until 2085 to reflect inflation.

He also wants to limit future state spending and require voters approve state borrowing.

New Jersey property taxes average $6,330 per homeowner, or twice the national average, and are constantly cited in polls as the leading concern of state voters.

The $2.2 billion rebate plan came with no guarantees for future years, though Democrats insisted the checks weren't an election-year ploy.

Kean, R-Union, said Corzine has plenty of options to cut state spending before slashing relief for homeowners.

"New Jersey is unaffordable for too many families," Kean said. "The rebates - being what they are - are one of the things that do make New Jersey more affordable for families. The first option should not always be that option which directly costs people money."