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New Jersey Towns Raise Local Property Taxes Above Christie's Proposed Cap
Posted On: Jun 14, 2010

New Jersey Towns Raise Local Property Taxes Above Christie's Proposed Cap

Robbinsville, the central New Jersey town where Governor Chris Christie appeared last week to promote his plan to cap annual property-tax increases at 2.5 percent, won approval yesterday to raise its tax bills by 29 percent.

The $2.3 million increase will boost the average homeowner’s municipal tax bill to $2,000 from about $1,600, Mayor David Fried said during a hearing before the state’s Local Finance Board in Trenton. It is the result of a 2007 reassessment that prompted warehouse owners such as closely held Matrix Development Group to file successful appeals that are costing the community more than $1 million, Fried said.

Fried was among 57 mayors Christie listed on a May 26 press release as supporting his plan to impose a 2.5 percent limit on annual property-tax increases. Christie was in Robbinsville June 3 for the fourth of several town hall meetings he is holding to talk about his proposal, aimed at controlling growth in New Jersey’s property taxes, which are the highest in the nation.

“We have done everything we possibly can,” Fried said during testimony on his tax increase. “It’s a very good question how we’re going to get to 2.5 percent.”

New Jersey’s property-tax bills averaged $7,281 per household last year, according to the state Department of Community Affairs. The levy has climbed 72 percent since they averaged $4,239 in 1999.

Over The Limit

Robbinsville is among 26 communities to seek approvals this year for property-tax increases in excess of the current cap of 4 percent that was put into place through legislation in 2007 by former Governor Jon Corzine, according to Local Finance Board records.

Fried said he averaged tax increases of 2.75 percent annually for the past six years. In an interview after the meeting, he said he can stick to Christie’s proposed limit as long as accompanying changes to public employee contracts are enacted.

Christie, a 47-year-old Republican who took office Jan. 19, is pressing lawmakers to approve his 2.5 percent cap by early August, in time for it to appear as a proposed constitutional amendment on the November ballot. He has said Corzine’s 4 percent limit allows for too many exemptions. Under Christie’s proposal, local governments and schools would only be able to exceed the cap through public referendums or to cover debt- service payments.

“Right now we have a very leaky cap,” Christie’s spokesman, Mike Drewniak, said in a telephone interview yesterday. “It is our goal to get a hard cap in place.”

Cost Control

Thirteen towns won approval yesterday to exceed the cap, including the Essex County town of Montclair, where the median income is almost double the U.S. level, according to U.S. Census Bureau data. Mayor Jerry Fried, 52, said he had no choice.

“A cut of this magnitude would be devastating,” Fried told the Local Finance Board in defense of a 10 percent tax increase worth $1.1 million. The average Montclair homeowner last year paid $15,585 in property taxes, which also includes school and county levies, state data show. Fried didn’t have an estimate of how much more bills would be.

Montclair’s credit rating was downgraded one step today to Aa3, the fifth highest, from Aa2 by Moody’s Investors Service, which cited declining state aid and imbalanced budgets. Moody’s called the township’s application for the property-cap exemption “evidence of continuing financial stress.” Fried didn’t immediately respond to telephone and e-mail requests for comment on the downgrade.

Pool Delay

Fried said residents were already outraged by a one-month delay in opening the municipal pool, a $90,000 cut in preschool subsidies and a $500,000 reduction in aid to the local library.

“Anything beyond that would be jeopardizing public safety and public support for the budget,” he said.

Christie has proposed a 33-point package of bills aimed at helping the state, municipalities and school districts control their costs. His plan would allow local governments to opt out of civil-service laws and cap public-employee raises and benefits at 2.5 percent a year.

Drewniak declined to comment on the situation in Robbinsville or other communities, saying they might be anomalies.

To contact the reporter on this story: Dunstan McNichol in Trenton, New Jersey, at dmcnichol@bloomberg.net

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Sep 14, 2011 (10:12:00)


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