Local Officials React to Tax Cap Passage

After months of debate and changes to the proposed tax cap, Gov. Chris Christie signed a 2 percent property tax levy increase cap into law last week.

The cap, no longer in the form of a constitutional amendment, caps tax increase separately for municipal, county and school governments at 2 percent. However, there are several exemptions written into the bill.

If a government wanted to go above 2 percent, they could hold a referendum seeking voter approval to go over the cap. The bill also includes four exemptions to the cap: rising health care costs, pension payments, debt service payments and capital expenditures, including new equipment and public works projects. This is a decrease from the 14 exemptions allowed under the current 4 percent property tax cap. Emergency situations are exempted and Boards of Education are exempt from the cap if they experience a spike in school district enrollment.

Councilwoman Ellen Dickson has been one of the most outspoken supporters of the tax cap since the idea of one surfaced earlier this year.

"I'm solidly behind the governor in the tax caps," she said. "I think New Jersey is rapidly becoming unaffordable for many of its citizens."

Dickson also emphasized that the tax cap isn't cutting taxes, it's slowing the rate of increase.

Mayor Jordan Glatt also said he is in support of the cap but would like to see the toolkit contain things that can actually help government stay within the 2 percent increase, such as reopening contract negotiations and raising retirement ages for pensions.

"Something's going to have to give if there's going to be this cap," Glatt said.

However, some supporters of the cap are disappointed in the deal reached by the state. A bill could be changed easily by any future governor.

"I would have preferred the constitutional amendment," Dickson said.

Having grown up in Massachusetts, Dickson said she knows the cap can work.

"Massachusetts is considered a much more affordable state to live in for many families," she said.

She also said she thinks many on council share her opinion on the cap and will do their best to keep the tax increase as close to 2 percent next year as possible.

"Without eviscerating city government, we'll try to come in as close to 2 percent as we can," she said.

However Glatt says that until Christie can reign in pension and healthcare costs, he's not sure how effective the cap is going to be.

"I'm not against the cap. But I can't tout it without seeing the whole program," he said. "(Christie) needs to address the big drivers: healthcare and pensions. All the other items, while are nice, aren't going to move the needle."