New Jersey and Taxes: Perfect Together

Want to fix the New Jersey property tax problem? Trenton has the answer. Raising every other conceivable tax and inventing a few new taxes to help.

This idea isn't going to go over well. One proposal being floated would turn some of the remaining free highways in the state into toll roads. That's right. If you drive the Pulaski Highway, Rt. 440 between the GSP and Turnpike, and I78, I80, and I95, New Jersey is looking at you to dig even deeper into your pockets for cash.

The administration -- in the most preliminary way -- has asked for proposals to study the conversion of Routes 78, 80 and 95, the Pulaski Skyway and the section of Route 440 in Middlesex County between the New Jersey Turnpike and the Garden State Parkway into toll roads. This idea grew out of previous discussions about selling or leasing the state's toll roads.

During interviews yesterday, state Treasurer Bradley Abelow and Transportation Commissioner Kris Kolluri confirmed that they had advertised for an engineering consultant and a traffic and revenue consultant to help determine what those roads might be worth if they were sold or leased to a private company. They stressed that the move was part of a wide-ranging state effort to look at any possible way to raise revenue.

"I think it might have started when I asked Kris why we have tolls on some roads and not others," Abelow said. "What would be the value of having tolls on other roads? It's not necessarily something we want to do or intend to do, but at least let's understand what it means."

The state hired the financial services firm UBS in September to study its assets and suggest ways they might be "monetized" -- that is, sold or leased to raise cash. The request for qualifications that led to the hiring of UBS made no mention of the non-toll roads.

Corzine's administration has done everything imaginable to raise taxes and make the state even less hospitable to businesses, and this is part of that pattern.

I understand that New Jersey faces a cash crunch and something has to be done to fix the crushing property tax burden, but the one thing that would surely solve the cash crunch is not even on the table - cutting the size of the state government workforce. Despite a state population that has largely remained stable, the size of the state government has blossomed. Not only are there more state workers, but the efficiency of the state has not improved and the cash crunch gets worse.

Federal and state rules govern that one cannot change the pension and benefits rules for workers who have been with the state longer than five years, but nothing stops the state from changing the rules for workers who have been with the state for less than five years. A changeover from a defined benefit plan to defined contribution plans could save the state hundreds of millions over the course of the next decade. Cutting the state workforce could result in similar savings.

Meanwhile, a report on how to deal with property taxes, including providing an average of 20% savings in property taxes, is to be delivered to Gov. Corzine today. Here's some real news - none of the recommendations actually save money - they call for redistribution of money and the creation of yet more bureaucracy to provide guidance and suggestions.

The first recommendation from the committee that studied consolidating towns and schools and sharing services will be to set up a commission of nine members with experience in business management, government policy or academic research, according to a draft of the panel's report.

The proposed Local Unit Reorganization and Consolidation Commission would recommend which towns should be merged. Unless lawmakers voted down the idea, mergers would be put up for a public vote in the municipalities involved, and each town would have to approve the proposed merger.

"If we are going to look at ways to reduce property taxes in this state, we need to look at ways to reduce governmental units," said Assemblyman John Wisniewski (D-Middlesex), the committee's co-chairman.

William G. Dressel, the League of Municipalities director, said he is concerned the commission would develop its recommendations with little input from officials or residents of the towns involved.

Members of the school funding committee are set to unveil more than two dozen proposals, including a plan to boost school aid by up to $1 billion a year and distribute the aid more widely, said Assemblyman Herb Conaway (D-Burlington), the committee's co-chair.

How exactly does boosting school aid solve the property tax problem. Indeed, where are the funds for that increase going to come from if not from various tax revenue sources? Once again, it will come from raising some taxes to pay for others.

The state will continue to shift its state property tax burdens on to the municipalities which will have no choice but to raise their own taxes. That doesn't benefit anyone, nor does it actually solve the problem of out of control state spending. Some spending might be controlled because local municipalities may be more receptive to voter action to curtail spending, but the state will continue spending money like it is going out of style.

Tagging the rate of property tax increases to the rate of inflation sounds like a great idea, but what about tagging the rate of wage hikes for state workers to a similar level. Again, we see the revenue sources in the crosshairs, but not the spending.

The proposals that have come out are already drawing skepticism. They should.