While the proposal to cut homeowners’ property tax bills by up to 20 percent is deservedly getting most of the attention, many of the other 98 property tax reform recommendations offer hope for more sustainable, long-term tax relief because they are aimed at government spending and efficiency, NJBIA President Philip Kirschner said today.

“Give credit where credit is due,” Kirschner said.  “From the beginning we called on legislators to focus their property tax reform efforts on government efficiency and spending and the special committees have made many recommendations that would do just that.  Now the legislature needs to follow through and pass these reforms.”

NJBIA Senior Vice President Melanie Willoughby, First Vice President Art Maurice, Vice President Christine Stearns and Director Christopher Emigholz are scheduled to testify December 7 before the four joint legislative committees that made the recommendations. 

The committees recommended bringing public employee benefits more in-line with those found in the private-sector, encouraging shared services and reforming education funding among the State’s 1,389 municipalities, school districts and taxing districts.

Among the common sense recommendations NJBIA is encouraging the Legislature to approve are:

• increasing the retirement age from 55 to 62;

• reforming the State Health Benefits Program by requiring employees and new retirees to pay at least some portion of their health insurance premium and allowing local governments to negotiate cost sharing with their employees;

• limiting the amount of sick leave compensation a local government or school board employee can receive upon retirement to $15,000;

• promoting shared services among municipalities by tying State aid to efficient government and streamlining the existing process for consolidation and shared services; and

• reducing education costs by expanding the role of county superintendents to include oversight of district spending.

“These recommendations and others like them go to the root cause of New Jersey’s highest-in-the-nation property taxes—excessive government spending,” Kirschner said.  He pointed out that local government spending is increasing at 6 percent per year, much of it driven by increases in employee benefit costs that are more generous than those in the private sector.

The $2.2 billion State Health Benefits Program, for instance, provides health insurance that, according to a 2004 Mercer Human Resources Consulting Report, is 25 percent more generous than comparable state government plans in Connecticut, Massachusetts, New York and Pennsylvania.

“New Jersey taxpayers should not have to pay for a level of health benefits and pensions that they do not receive themselves,” Kirschner said.

Likewise, reforming how New Jersey funds its schools is critical.  Schools account for 55 percent of all property taxes, and that’s in addition to State aid to schools, which is the largest single expense in the State budget.

“No tax relief program, no matter how well conceived, will be able to sustain itself over a long period of time without controlling the cost of local government,” Kirschner said.  “Government spending and employee benefits is the driving force behind rising property taxes up and getting control of government spending is the best way to provide meaningful property tax reform.”