Corzine considering idea as revenue option

Corzine considering idea as revenue option

Saturday, November 04, 2006

BY TOM HESTER AND DUNSTAN McNICHOL

Star-Ledger Staff

The top two leaders of the Legislature said yesterday raising local taxes will not be part of property tax reform, even though Gov. Jon Corzine continues to consider that an option.

Facing a Nov. 15 deadline for producing a plan, Senate President Richard Codey (D-Essex) and Assembly Speaker Joseph Roberts (D-Camden) said a revised school funding formula, government consolidation and tight caps on local spending were the main topics the two discussed during a closed-door meeting yesterday at the Statehouse.

Corzine, who was not at the meeting, had introduced the idea of allowing towns to raise revenue through local taxes -- such as a local sales, wage or parking tax -- when he addressed a joint legislative session in July.

“New taxes are off the table," Codey said. "The goal is very clear: Immediate tax relief and, in the long-term, stability."

Codey and Roberts said they are moving toward a consensus on how to reform public employee pensions and health benefits and encourage towns and school districts to share services or consolidate.

They're also considering plans for a strict cap on local government and school spending and a new formula for distributing billions of dollars in school aid every year.

Roberts said a new school funding formula would eliminate the special class of so-called "Abbott" districts -- the state's poorest -- that receive billions of dollars in court-ordered state aid. Instead, the formula will attempt to steer funds to all needy districts, including growing suburban and rural districts.

"It will be a system that is fair and reflective of the state as it is today," Codey said.

Codey and Roberts declined to reveal specifics of how much their initiatives would cost or save.

They said final proposals will be presented by the chairmen of the four legislative committees set up to tackle property tax issues, and they expected to meet the Nov. 15 deadline set by Corzine.

"There's an enormous amount of common ground between the Senate and Assembly," Roberts said. "We will probably end up with more than 50 bills."

Yesterday's meeting included presentations by legislative aides from each of the tax relief committees and input from the budget and tax experts from the nonpartisan Office of Legislative Services.

Although Codey and Roberts said as far back as two weeks ago the idea of allowing municipalities to levy local sales is dead, Corzine and his policymakers continue to consider the idea.

"The possibility of giving communities the limited option to raise new revenues is one of several ideas the governor mentioned during his joint address to the Legislature in July," said Anthony Coley, a Corzine spokesman. "Ideas like this one, which could lead to greater fairness in the system, should certainly be a part of the ongoing discussion about property taxes."

Corzine also is considering giving cities and towns the power to levy impact fees on home builders to help cover the cost of public services their developments require, such as new schools and public works projects. He would need the Legislature's support to make it happen.

William G. Dressel, director of the New Jersey State League of Municipalities, confirmed Corzine's aides have sought his insight on the idea of a tax levy.

Dressel said legislation to allow local tax levies has to be optional and the state cannot mandate it for cities and towns. He said, in turn, towns have to ensure levying a tax would not drive away businesses, shoppers or residents.

"But you can't be naive and believe it is going to solve the property tax problem," he said. "That is a false perception and not an accurate statement to make. The bottom line is we believe there should be enabling legislation which would allow 566 municipalities the authority to impose local option taxes and to make that kind of hard-nut policy decision."