Voters will get to decide whether to amend the state constitution to dedicate one cent of the state’s 7 percent sales tax to property tax relief through a ballot question next week.
The measure is expected to pass easily, which would mean that more than $1.4 billion in sales tax receipts will be dedi- cated to property tax relief annually.
Another critic is Jon Shure, president of New Jersey Policy Perspective. He argues that dedicating sales tax money for property tax relief limits the state’s ability to deal with future budget needs, takes away money that could otherwise be used to reduce the structural deficit and puts off the comprehensive restructuring of state and local taxes that New Jersey really needs.
“Dedicating revenues is one thing that got us into this mess,” Shure said. “It sounds like such good policy … but it really is a way of avoiding tough decisions and when you add them all up over time, they have contributed to the state’s fiscal mess.”
“The purpose of the state budget process is to determine priorities,” he added. “How does the state set priorities if it’s dedicating this and that, avoiding hard discussions about what we really need and how we can pay for it?”
Bogota Mayor Steve Lonegan is campaigning against the ballot question with lawn signs, bumper stickers and media appearances.
Lonegan agreed that the state should not be diverting money away from addressing the structural deficit. He also feels the underlying statute, which calls for one percentage point of the sales tax to be spent on property tax relief, but not necessarily rebates, is “vague, ambiguous and misleading.”
Last year, Corzine and legislative leaders fought over the sales tax increase, with Corzine arguing in favor of it as a way to close the budget gap and lawmakers against it. The disagreement led to a weeklong shutdown of state government.