News Archives
July 21, 2010
2.0% Property Tax Cap Signed Into Law
On July 8, 2010 the State Senate passed the conditional veto (CV) of S-29 (Sweeney), which establishes a 2.0% annual property tax levy increase for local governments, including municipalities, counties and school boards. The bill passed 36-3, with Senators Rice (D-28), Smith (D-17) and Turner (D-15) voting no. The State Assembly passed the bill on Monday, July 12, 2010 by a 73-4 vote. Opposing the bill were Assembly members Wisniewski (D-19), Quijano (D-20), Diegnan (D-18) and Watson-Coleman (D-15). The bill, which was opposed by the New Jersey State AFL-CIO, was signed into law on July 13, 2010 by Governor Christie.
The law has “cap exceptions” for capital expenditures, including debt service, as well as health insurance and pension costs and certain emergencies. The bill would place the cap in statute, not in the Constitution, as originally proposed. Finally, the bill allows for local governments to exceed the cap via voter referendum.
Property tax relief is an extremely important issue for New Jersey residents and our membership that must be addressed. However, the New Jersey State AFL-CIO has strong concerns with the cap when testifying before the Assembly Appropriations Committee, urging them to slow down the “fast track” process and take a deliberative, comprehensive and analytical approach to this issue, rather than rushing a cap bill that has shown to have strong adverse consequences to communities and residents when enacted in other states.
When implemented, the cap will lead to significant layoffs of police, firefighters, teachers and local government employees. Furthermore, the cap will dramatically increase privatization and outsourcing of services, further sacrificing jobs. Finally, many essential government services will be ended, and communities will see a host of related problems – ranging from increased class sizes, to a massive growth in user fees, as well as deferred or elimination of maintenance of infrastructure.