New Jersey Senate Approves Property Tax-Cap Measure Backed by Christie

The New Jersey Senate passed a plan backed by Republican Governor Chris Christie to put a 2 percent limit on annual increases in property taxes, already the highest in the U.S.

The 36-3 vote came five days after Christie and Senate President Stephen Sweeney, a West Deptford Democrat, announced the compromise on a cap for the levies, which climbed 72 percent between 1999 and 2009. The plan would cut the current 4 percent ceiling and allow for fewer exemptions.

“He can’t run around claiming victory and I can’t run around claiming victory,” Sweeney told reporters on the Senate floor following the vote. “The taxpayers won. We got it. We’ve been listening.”

Democrats control the Senate 23-17 and the Assembly, 47-33. Assembly Speaker Sheila Oliver, an East Orange Democrat, has said her chamber supports the compromise. She said in a statement today the Assembly will vote on it July 12. New Jersey property taxes averaged $7,281 last year, higher than any other U.S. state.

Christie, 47, the first Republican elected governor in the state since 1997, called in May for a constitutional amendment capping property-tax growth at 2.5 percent with exceptions only to cover bond payments or with local voter approval. Democrats had pushed for a statutory cap with more exemptions.

Impact on Towns

“Finally, New Jerseyans can see the beginning of the end of our property-tax nightmare,” Michael Drewniak, a Christie spokesman, said in an e-mailed response to questions. “We look forward to speedy consideration and passage in the Assembly.”

Under the compromise, schools and local governments could exceed the limit to cover rising health-insurance costs, bond payments, natural disasters and pensions, Christie said. Communities also could go above the cap through a public referendum, he said.

Lawmakers will hold hearings on Christie’s 33-point “toolkit” of legislation allowing mayors and school officials to remain under the ceiling by letting them opt out of civil service and capping contract awards, Sweeney said. It also would curb payouts for unused sick-leave and vacation, and end the “bumping” rights that let the highest-paid, senior workers avoid layoffs.

Oliver, who controls the Assembly agenda, said legislative committees will hold weekly hearings on the plan through the next few months. Drewniak said Christie will press lawmakers to “keep the momentum” going and approve the package.

Three Democrats in the Senate, Bob Smith of Piscataway, Shirley Turner of Trenton and Ronald Rice of Newark, voted no on the tax cap. A fourth, Nia Gill of Montclair, was absent.

Arguing Against

Before the vote, Smith said lawmakers were rushing to enact the levy limit without giving communities that rely on the tax time to make the transition. It may leave some towns unable to pay workers and force them to fire workers, cut services or enact user fees to raise revenue, he said.

“These cuts are going to be monstrous not just in terms of dollars but in terms of people,” Smith said on the Senate floor. “A decision of this magnitude was made without sufficient public input.”

The tax ceiling is below a 2.9 percent threshold approved by lawmakers last month. To expedite passage of the plan, Christie vetoed that legislation and lawmakers amended it to reflect the compromise. The amended bill passed today.

To contact the reporter on this story: Terrence Dopp in Trenton at tdopp@bloomberg.net.