Trenton, NJ – In a visit to Hoboken today, Governor Chris Christie kicked off an ongoing conversation with New Jersey families on his Reform Agenda for real, lasting property tax relief. Last week, the Governor outlined a sweeping 33-bill reform package to solve New Jersey’s property tax crisis and control spending at every level of government. The centerpiece of the plan is Cap 2.5, a constitutional amendment creating a 2.5 percent cap on property tax increases.
Property taxes have grown an astonishing 70% over the last ten years, resulting in an average annual property tax bill of $7,281 on New Jersey families – the highest rate in the nation. Cap 2.5 will halt the astonishing growth in property taxes while the Christie Reform Agenda will give towns and school boards the tools needed to control spending to make Cap 2.5 both realistic and achievable.
“It’s time that we finally put the power to control property taxes in the hands of those who are paying the bills – New Jersey’s overburdened taxpayers. Cap 2.5 and the accompanying tool kit reforms will bring the relief our families desperately need and achieve the overdue reform necessary to empower taxpayers in the Garden State,” said Governor Christie. "The stakes couldn’t be higher for our families and future generations of New Jerseyans. By acting swiftly to adopt this needed reform, we will take an enormous and critical step towards making New Jersey more affordable again.”
CAP 2.5 & “Tool Kit” Reforms To Deliver Real Property Tax Relief
Under Governor Christie’s proposal, the property tax levy cap allows for adjustments in the event a municipality adds new ratables, and provides a single exclusion from the cap in the form of debt service payments. Current law provides for a 4% cap with at least 13 broad exclusions that render the cap virtually meaningless. This new cap will force local governments to eliminate waste and inefficiencies in their own operations and will enable school districts to better manage their budgets.
In 1982, Massachusetts voters approved and implemented a similar Cap 2.5 amendment. The Massachusetts model encouraged municipalities, school districts and counties to reduce annual tax increases below the 2.5 % by allowing them to “bank” the unused amount for future use. To exceed the levy cap, municipalities must have voter approval. More than 25 years later, Massachusetts went from having the 3rd highest local tax burden to 33rd highest.
The plan also calls for collective bargaining reforms that prohibit any arbitration award from exceeding the 2.5 percent cap and requires arbitrators to consider the impact on property taxes when making their decisions. Proposed changes to the civil service system would provide greater flexibility for municipal and local governments to conduct furloughs, and create options for local governments to opt out of civil service.
Governor Christie’s reform package provides key modifications in a number of other critical areas including employee pensions and benefits, red tape and unfunded mandates, election reform and shared services. He has also recommended a number of measures to assist higher education institutions in New Jersey lower costs, economize, and manage their budgets more effectively.
