Editorial on NJ Property Taxes from the Philly Inquirer:
The one thing that seems to get otherwise rational New Jersey residents to foam at the mouth is the state’s punishing property-tax system.
Property owners spend an average of $7,759 a year to support schools and municipal services. Sometimes they get tax rebates to offset the pain. Sometimes they don’t.
Now there is a dispute between state Senate and Assembly leaders, who want to give residents a property-tax credit on their state income taxes, and Gov. Christie, who wants to cut the income tax by 10 percent.
The governor’s plan would mean a $7,000 tax cut for millionaires, but only an $80 reduction for families earning $50,000. If that sounds wrongly skewed, it’s because it is. That paltry sum won’t help poor and middle-class New Jerseyans struggling with higher prices for food, gasoline, and health care.
The Christie plan also rests on a very shaky projection that state revenues will increase 7.3 percent next year, a figure that only the governor’s office seems to think is realistic in this fragile economy. His plan should be dismissed out of hand, so legislators can concentrate on meaningful property-tax cuts.
The Assembly’s proposal would give property owners earning less than $250,000 annually a 20 percent credit on their income taxes for property taxes paid up to $10,000. That would be paid for, in part, by raising the income taxes of millionaires.
The Senate plan would grant a 10 percent credit for those earning $250,000 or less, but relies on the governor’s revenue figures to cover costs. That’s too big a gamble.
The Assembly plan makes more sense. Only about 16,000 of New Jersey’s 2.6 million income-tax filers would see their tax rate increase from 8.97 percent to 10.75 percent. They can well afford to sacrifice a bit more than others who have shouldered the most in this down economy, with its job losses, wage cuts, and higher gas prices.
Both legislative plans would fold the property-tax credits into the state’s tax code. That means governors would no longer be able to dangle property-tax rebates in election years and pull them back when revenues fall.
The legislative leaders are not that far apart. It’s time for them to work out their differences and speak in one voice. Divided, they will be conquered. New Jersey property owners deserve to win this argument.