New
plan would hike income tax for schools
But proposal would derail constitutional
convention
Monday, May 02, 2005 • BY JOE DONOHUE AND TOM
HESTER • Star-Ledger Staff
The constitutional convention planned for later this
year to address New Jersey's rampant property tax problem is
in serious trouble in the state Senate, according to four
top lawmakers from both political parties.
As a result, three legislators and a powerful union will
endorse an alternative plan today that would slash property
taxes for schools in half but raise the state income tax on
most residents.
A demise of the constitutional convention legislation,
which an Assembly committee approved in March, would be a
stinging defeat for activists who support the concept and
blame lawmakers for failing to control property taxes.
Senators say the convention idea has thus far failed to
overcome two key hurdles: rules that forbid it from
suggesting ways to cut local spending and politicians'
desire to maintain decision-making power on issues like
taxation. In addition, acting Gov. Richard Codey and Senate
Minority Leader Leonard Lance (R-Hunterdon) have criticized
the convention plan, which was advanced by a task force in
December.
"It needs a little life-support," said Sen. Joseph Doria
(D-Hudson), who also opposes the convention. "We were
elected to represent the people. We should do our job."
Senate Majority Leader Bernard Kenny (D-Hudson) denied
the convention legislation was dead, but said "there are
concerns and those continue."
Sen. John Adler (D-Camden), the main proponent of
convention legislation in the upper house, declined to
discuss specifics of its prospects, but said: "I will keep
arguing for property tax reform and that includes a
convention or legislative action. I have always been willing
to do it either way."
Assembly Speaker Albio Sires (D-Hudson) said his lower
house still plans to approve convention legislation by May
23, but Cy Thannikary, chairman of Citizens for Property Tax
Reform and a member the task force that proposed this plan,
said, "I suspect the Senate will let it stall."
William G. Dressel, director of the New Jersey State
League of Municipalities, also suspects the Senate will
allow the convention legislation to die.
"I am very disappointed that this whole effort is going
to be derailed," he said.
For now, legislators said, the plan gaining momentum is
a property tax reform bill sponsored by Assemblyman Louis
Manzo (D-Hudson).
Under the Manzo bill, anyone earning $30,000 or more
would pay higher income taxes.
In return, school taxes would be slashed by half.
The proposal would raise income taxes by $3.7 billion,
but promises property tax cuts of $5.1 billion. Homeowner
rebates, which totaled $1.4 billion last year, would be
eliminated.
In addition to the legislators who favor Manzo's plan,
officials with the powerful New Jersey Education Association
teachers union said they will support it and push it in
radio advertisements.
"Sooner or later, this is the kind of approach that will
need to be done in order to fix New Jersey's over-reliance
on property taxes," NJEA lobbyist James Schroeder said.
Manzo said taxpayers and tenants who earn less than
$300,000 would save money on the tradeoff.
About 67,000 of the state's wealthiest taxpayers would
be hardest hit, he said.
Last year, the average property tax bill was $5,517,
according to a Star-Ledger analysis. Of that amount, an
average of $3,057 went toward school funding.
Codey's spokeswoman, Kelley Heck, said the acting
governor "is open to looking at any alternative, including
this one." And Doria, a Senate sponsor, called it a "good
first step. It's a jumping off point for discussion."
However, some powerful Democrats object to raising the
income tax that much.
"As long as it increases the income tax, he would be
opposed to it," said Ivette Mendez, a spokeswoman for Sen.
Jon Corzine, the Democratic candidate for governor.
"I see little if any support among Democrats in the
Assembly for an income tax increase of that magnitude,"
Assembly Majority Leader Joseph Roberts (D-Camden)
said.
Republicans criticized the bill because it would raise
taxes and would not tighten limits on local spending.
"If you don't control spending, taxes are going to
rise," Republican gubernatorial candidate Bret Schundler
said.
Joseph Marbach, chairman of the political science
department at Seton Hall University, said that because all
seven GOP candidates and for governor Assembly Republicans
have unveiled plans to reduce property taxes, Democrats may
feel pressure to do likewise.
But taxpayers, he said, should not hold their breath.
"Nothing's going to get done before the election," he
added.
© 2005 The Star-Ledger. Used by NJ.com with
permission.
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