Tax-cut ideas not 'bold' enough, Corzine says

Gov. Jon Corzine said yesterday he was "encouraged" by lawmakers' plans to tackle property taxes but urged them to be bolder in pushing for town mergers and other long-term reforms, and demanded that a planned 20 percent property tax credit be financed responsibly.

"Reform is popular. Reform and sustainability are hard, very hard," Corzine told hundreds of state and local leaders at the League of Municipalities' convention in Atlantic City. "If some people aren't screaming at the end of this process, then I guess I'll know the reforms aren't bold enough."

One day after his fellow Democrats who control the Legislature unveiled 98 proposals to tackle the thorny problem of property taxes, the governor hinted at areas where he felt the plan fell short.

Corzine said we "absolutely need" a state comptroller to serve as a watchdog over government spending -- a proposal given only lukewarm support in the legislative plan. And in an idea that met with immediate resistance, he urged the Legislature to be more aggressive in pushing for government consolidation at the local level.

"The more risk we take in the final product, the more likely we are to bring actual, lasting and beneficial change," he said. "Bold, bold, bold action in both relief and reform is what we need."

The Legislature has proposed a commission to recommend mergers and shared services among towns and school districts. Corzine said it is critical that that commission have "real power" and that state funds be set aside to create "powerful incentives" for its recommendations. He said the state needs to help underwrite consolidations and shared services so up-front costs don't discourage them.

But that could leave less to hand out to taxpayers in the form of direct property tax relief next year, when lawmakers face re-election. Threatening New Jersey's tradition of home rule also has some lawmakers concerned.

"I think he wants to go further with consolidation than the public would want and the Legislature would want," Senate President Richard Codey (D-Essex) said after Corzine's speech.

"The public is not necessarily in agreement. They want lower property taxes, but not necessarily through consolidation," Codey said, noting that in his own district last week, Maplewood voters defeated a proposal to just study the idea of consolidating with South Orange.

The Senate president said he believed that despite that difference, lawmakers and Corzine were mostly in agreement. For example, Codey, who has been skeptical of the need for a comptroller in the past, said he believed the Legislature will reach a compromise with Corzine on that issue.

The governor said he supported the legislative recommendation to provide a 20 percent tax credit for a "substantial portion" of homeowners. But he said that goal is "constrained by available resources," and he demanded that it be paid for responsibly -- something the Legislature has yet to spell out.

"Providing relief and then retreating in a year or two because we don't have the money is neither desirable nor acceptable," Corzine said. "Let me be clear: Whether the subject is the budget or property taxes, I can't support short-term fixes."

William Dressell, executive director of the League of Municipalities, said Corzine's remarks, while veiled, were a criticism of the Legislature's "very, very vague" plan.

"That report, you could drive a truck through it," he said. "Which classification of property taxpayers would benefit?"

But Dressell also said he was "concerned" and "worried" about Corzine's calls for more aggressive consolidation of local governments because it could jeopardize "adequate public service levels."

Assembly Speaker Joseph Roberts (D-Camden), who was in attendance at Corzine's speech, acknowledged that "we haven't provided enough detail" on the 20 percent tax credit.

"I think we need just a bit more time to identify" funding sources, he said. He also said a plan to rework the state's school aid formula does not need to be ready until early next year.

Roberts said one way to help pay for the credit would be to dedicate all of the revenue from the one-cent increase in the sales tax enacted last summer to property tax relief.

State Senate Minority Leader Leonard Lance (R-Hunterdon) said that could blow a new hole through next year's budget, which Corzine says is already facing a deficit.

"There are other ongoing responsibilities of state government. The governor recognized that today and spoke about that today," Lance said.

Roberts and Corzine clashed on the issue during last summer's battle over the state budget; a compromise dedicating half the sales tax increase, about $700 million, to property tax relief was approved by voters last week.

Roberts and Assembly Majority Leader Bonnie Watson Coleman (D-Mercer) yesterday downplayed any differences with the governor. They said they agreed with him on the comptroller, and were willing to be more aggressive on consolidation and shared services.

"There is nothing he has proposed that we don't think can be considered within the framework of the 90-some recommendations that have been made," said Watson Coleman. "So we're very confident that we're going to be able to move forward ... and work out the details."

Jeff Whelan covers politics. He may be reached at (609) 989-0379 or jwhelan@starledger.com.