>Steve Lonegan: Will Cap 2.0 Solve New Jersey’s Property Tax Problem?
Politicians in Trenton are patting one another on the back after passing the “compromise” Cap 2.0 proposal yesterday.
Trendy sounding Cap 2.0 purports to limit property tax hikes at 2% with several exceptions, including exemptions for “pension costs, health care costs, debt payments and states of emergencies.” Towns could exceed the 2% cap by putting the proposal up for referendum and receiving a majority vote.
But will Cap 2.0 work? Do New Jersey homeowners, who are subject to the nation’s worst property taxes, have reason for optimism?
If history is any judge, then the answer is a resounding NO.
In 1976, New Jersey taxpayers were promised relief when the state enacted an income tax with a corresponding cap. Funds from the income tax were dedicated to the “Property Tax Relief Fund” to be returned to municipalities in the way of municipal aid, school aid, and property tax rebates. But as Columnist Paul Mulshine pointed out in a Star-Ledger article last week, towns began to circumvent the cap and avoid referendum – instead issuing bonds and accruing debt.
In that year, voters were told the new cap would have several exemptions and that an increase in excess of that cap would have to go before the voters. That’s right-this law has been on the books for 34 years!
Since 1976, different permutations of the cap have been enacted during the administrations of various governors including Jim McGreevey and Jon Corzine. Yet, New Jersey’s property taxes have continued to escalate.
Now, New Jersey property tax payers are being told once again that a cap is the answer. That this time it will be different and finally we will be able to resolve our state’s intractable property taxes.
But the fact of the matter is New Jersey’s property tax problem will not be resolved with the mere passage of another cap scheme – let alone new political posturing that does not stop the runaway spending in Trenton. Massive, bloated state government is subject to no such cap, and it is big government in Trenton that is the problem, not the solution.
Abbott District funding, state mandates, COAH requirements, Project Labor Agreements, and binding arbitration are the driving forces behind high property taxes.
The property tax problem is one of Trenton’s making. Until the Governor and the Legislature address these issues head on, property taxes will remain on the rise in New Jersey and Cap 2.0 will do nothing to stop it.
Steve Lonegan
