New Jersey Shell Game

No option – no matter how politically unpopular or constitutionally challenging – will be out of bounds during an unprecedented legislative session this summer to tackle rising property taxes and growing state expenses, top lawmakers said Tuesday.

If that means rewriting the state's income tax code, raising sales taxes or forcing hundreds of local governments to share services, so be it, legislators said. The biggest reasons behind rising costs – school funding, public employee benefits and multiple levels of government services – will be examined to find ways of lowering local tax bills, which now average nearly $6,000.

And if this special legislative session doesn't work, Senate President Richard Codey and Assembly Speaker Joseph Roberts said, they will ask voters to consider a constitutional convention that would take the issue out of their hands. For years, lawmakers have offered rhetoric and sound bites while budgets grew and property owners were forced to pay up, Codey said.

So, no action has been accomplished in decades to resolve the tax issues facing the state. Constitutional conventions have failed. The legislature has failed. So why does anyone think that a new special session of the legislature will succeed now?

If anything, the issues underlying the need to reform the tax structure in New Jersey are far more dire than they were a generation ago. Property taxes are sharply higher in just the past few years, and the Abbott rules distort the way money is appropriated for education.

And yet, a key factor in fixing the state's fiscal problems will likely go unaddressed - a complete and utter lack of fiscal restraint. Spending is out of control and if the state wants to deal with controlling taxes, the first place to look is the rein in spending. Is anyone in the legislature going to stand up to the unions or other interest groups that will pull out all the stops to prevent funding cuts to their pet programs in an election year?

Meanwhile, Gov. Corzine is calling for a new push to build affordable housing in New Jersey. Sounds good considering that New Jersey is the most expensive state for homeowners and third most expensive for renters according to the US Census bureau. The problem is that Gov. Corzine didn't mention any specifics: how much the program will cost and the time frame under which the housing would be built.

Now, I don't have a problem with the need to build affordable housing in New Jersey (or anywhere else in the NY metro region for that matter), but there are good reasons that there is such a dearth of affordable housing. Strict rules on building new housing - zoning restricts the amount of housing, open spaces rules restrict where developers can build new houses, and other factors limit where new housing can be built. That forces prices of existing stocks up. High crime reduces the likelyhood that people will flock to places where prices are lower - like in Newark or Paterson. Lack of transit options force people to flock to those locations with ready links to NYC, forcing prices up in those areas.

Simply throwing money at affordable housing projects will only result in more government spending and no appreciable change in housing stocks. Making communities safer and more attractive to development will improve housing conditions - developers will recognize that prices will rise if the communities are seen as stable, growing, and attractive. One of the reasons that developers have flocked to Jersey City's waterfront is that zoning rules have changed and developers see profit from building there.