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The League of Women Voters a nonprofit,
nonpartisan organization whose purpose is to
promote political responsibility |
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Recommendations to Property Tax Convention Task ForceDeborah Macmillan, President Judith Cambria, Fiscal Policy Specialist The League of Women Voters of New Jersey has been involved in the struggle to reduce New Jersey’s over-reliance on the local property tax for almost half a century. The League believes that an appropriately structured Property Tax Convention, with the power to recommend changes both to the New Jersey Constitution and to statutes, has the capability of successfully developing a property tax relief plan for the consideration and vote of New Jersey citizens. League members believe it is “wishful thinking” to believe that the Governor and members of the Senate and Assembly can or will successfully address this issue. The political pressures that have stymied effective action are a systemic problem that will continue to derail efforts by our elected leaders to solve the property tax problem. Trends in recent years require action now rather than delay. The amount of property taxes collected has grown dramatically in recent years, and their proportion of total taxes has increased significantly as well. In reaction, those individuals and families who are financially able to do so choose to move to municipalities/counties where property taxes are low. So does business. The result is greatly increased taxing inequities among municipalities and school districts, and rapid acceleration of economic and racial stratification in New Jersey. Many formerly economically viable municipalities now look more like New Jersey’s distressed and failing cities. Faced with inadequate local tax revenue, growing enrollment, and virtually frozen state school aid, highly thought of school districts have been forced to cut staff, increase class size, and reduce program offerings. This leads to increased movement of higher income families to more desirable school districts, further exacerbating present trends. Scope of ConventionThe League supports wording from earlier legislation that provides the duty of the convention be “to prepare a proposal consisting of amendments to the New Jersey Constitution and revisions to existing laws, which
Revenue NeutralThe proposed property tax relief plan should be revenue neutral. This means there should be no increase or decrease in total revenues. The reduction in the property tax should be equal to the new and/or alternative revenues. The League opposes the alternative definition that revenue neutral should be defined as new and alternative revenues plus spending reductions. Responsible for Tax Structure, Not Spending DecisionsDelegates to this convention should be charged with developing a new tax structure to replace one that relies far too heavily on the local property tax. The League strongly opposes giving delegates the power to supplant elected officials in municipal and county government or elected or appointed school board members in determining spending at those levels of government. There are established, lengthy procedures that take months of preparation, which already govern the development and approval of budgets at the various levels. The convention would flounder and fail if it entered the quagmire of considering spending at the municipal, school, county and state level SustainabilityDelegates should be charged with considering policies and devising means that provide for sustainability of property tax reductions for residential property owners. No Limitation on Consideration of All Types of TaxesThe Task Force, and the legislation it puts forward, should not preclude consideration of all types of taxes. This includes a statewide equalized property tax. Since New Jersey will have to continue to rely on the property tax as a major source of revenue, even if citizens approve a restructured tax system to reduce reliance, delegates must have the ability to consider all ideas. (At present, the national average for property taxes as a percent of revenue is about 31%). The property tax is paying a very large proportion of school costs already. However, the value of property varies widely by municipality and school district. Differences also exist in the business base as well as housing. A statewide equalized property tax has the ability to tap the entire property tax base as a source of support for every school district, not just the local district where the property is located. This has the potential to help equalize access to property tax revenue, making some of it available to balance existing inequities. Homes and business can be considered separately. The constitutional provision requiring business and homes to be taxed at the same rate should be reviewed. Limitation on Consideration of Constitutional ProtectionsThe League strongly opposes the wording used in the Background Paper on Subjects for Consideration in section 1, “Elimination of consideration of unrelated Constitutional protections”. The League supports making constitutional protections of rights off limits. However, The League cannot support the wording used above, including the word “unrelated”. It is clear that many individuals believe that the NJ Supreme Court’s decision in Abbott v. Burke is “related” to the property tax problem and will use the above language to have it become part of the deliberations and decisions of the convention. When one considers the “constitutional protections” included in the NJ Constitution, what becomes apparent is how frequently elected officials have used, perhaps the better word is “misused”, the Constitution and cluttered it up with all sorts of things that belong in statute. Important constitutional rights are co-mingled with ways of distributing tax relief and other issues that fail to rise to the constitutional level. The League unequivocally believes that convention delegates must be restricted from changing the Education clause of the New Jersey Constitution that requires the state to provide a “thorough and efficient system of education for all children”. This clause, as interpreted by the New Jersey Supreme Court, assures that all children are constitutionally entitled to a high quality education that prepares them for citizenship in a democracy and for participation in the work force. Such a definition is essential in our society where education plays a key role of educating children to be knowledgeable and active participants in a democratic system of government. It also assures that children will be prepared to be productive participants in the economy, rather than a drain on resources. If the Task Force recommends legislation that gives delegates at the proposed convention the power to consider and change the “Through and Efficient” clause of the New Jersey Constitution, LWVNJ will oppose the convention, both at the legislative level and at the public referendum should it be approved by the legislature. * Please see Appendix for additional material on LWVNJ participation as amicus curiae in Abbott cases and on our position on the essential importance of the Abbott decisions in improving public education and assuring equal opportunity for all children to receive high quality education. Election DistrictsIt is unrealistic to believe we will be able to draw new election districts lines for the property tax convention election. The most reasonable scenario is to use present districts for New Jersey State Senate and Assembly seats. Election of two delegates per district will provide a small, reasonably sized body. DelegatesThe Task Force should have as a goal a nonpartisan, not a bipartisan convention. Property Tax Reform is not, and should not be used, for partisan purposes. The convention should be limited in size to promote a high level of individual participation and communication. There should be balanced representation that reflects geographic needs and interests, diversity of background and age. Sitting legislators should be barred from participation as delegates. They have had ample opportunity to address the issue. Not only have they been unsuccessful, they have aggravated the problem with increased state spending and heavy indebtedness. If the election for delegates is combined with the general election ballot, all candidates for local or state positions should be barred from running for convention delegates. Such delegates would have a great advantage in fiscal resources and public exposure, and their presence would distort the convention election. Individuals who have served in the Senate or Assembly should be eligible to be delegates. They can provide the experience and wisdom of experienced legislators who do not face the constraints of running for re-election. Neither political party should have a commanding presence among delegates. The existing factionalism of the political parties on issues of taxation will be detrimental to achieving consensus. Candidates for delegate in a single district should be required to run individually and barred from running as a team. No slogans on the ballot. A small proportion of appointed delegates (10-12 depending on size of convention), should be appointed by a nonpartisan group to achieve broader representation of existing expertise (based on experience and background and commitment to property tax reform), and to achieve greater diversity. All former elected governors should be eligible to serve as delegates if they desire. Schedule of ConventionFull or Part Time, Monday to Friday, Weekend Assuming a convention that meets from April 4 through July 29-30, a five-day week provides 85 work days, a 3-day weeks provides 51 work days, and a 2-day week provides only 34 work days. A 3-day week provides 40% less meeting time than a 5-day schedule. Committees could be scheduled to meet on specific days of the week, cutting the number of days a delegate would have to be in attendance every day and utilizing staff more effectively. Toward the end it is likely that delegates would have to be in attendance at most sessions. Three days including a Saturday would make it possible for more individuals to consider becoming a delegate. Five days would severely limit those who could become delegates and cause a problem with overrepresentation of senior citizens who may well have different priorities than younger citizens.Pay, Expenses, Per Diem Remuneration seems essential to achieve diversity and to widen the pool of potential delegates. Travel should be reimbursed on distance traveled, separate and apart from other remuneration.Election of DelegatesProvide incentives to encourage modest spending and to make the opportunity to run for delegate more accessible to a wider variety and greater number of citizens. The process for becoming a delegate should result in diversity by increasing accessibility and affordability. Provide a free mailing, a free televising of delegate spots, and placement of these personal statements by candidates on public TV for those individuals who agree to limit their spending to a specified amount. This would help level the playing field, provide greater access to information about delegates by voters, and encourage limited spending. Timing of Public Vote on Approval of Property Tax Convention and DelegatesThe election for delegates to a property tax convention should be held separately from the ballot question asking for approval of such a convention at a General Election. It is important to separate the election of delegates from the 2005 election that includes selection of NJ Governor, Senators and Assemblymen and the ballot question on the convention itself. The convention delegates would not be the major focus and the likelihood of influence of partisan politics in selection of delegates would in greatly increased. It is not appropriate to ask citizens who desire to run for delegate to spend money, time and effort when there is no assurance the public will approve the ballot question. While there would undoubtedly be a lower turnout of concerned voters at a special election, it is likely that it would be significantly higher than for school elections and many primaries because the property tax burden is so significant a problem for so many NJ citizens. The cost is one worth paying for greater public focus on delegate selection, wider opportunity for more citizens to run for delegate, and greater public exposure of the whole process for the property tax convention. Public Vote at General ElectionThe public questions presented to voters at the General Election (2005) asking whether they approve or disapprove holding a property tax convention must include two separate referenda:
Single Vote by Public on Constitutional and Statutory Elements of Any Plan Presented to the Public by Delegates to a Property Tax Convention. The Task Force should require that there be a single vote by the public on all constitutional and statutory changes agreed to by delegates as a property tax relief plan. Multiple votes would lead to votes in favor of appealing features and votes against those needed to pay for those features; in short, a recipe for an unworkable disaster rather than a solution. Review to Assure Recommendations are Consistent with MandateThe League supports a review by an outside individual or group to assure citizens that the delegates/convention have not exceeded their mandate. The judicial branch seems a reasonable source of unbiased reviewers. Period of Time that Changed Statutes Should Remain in EffectAny changes in statute approved in the plan presented to the public for a vote must remain in effect for a sufficient period to enable to responsible judgment on their success or failure. Assuming approval at a November General Election, the next year budget in preparation at that time must reflect the changes. And the changes must remain in force through the following budget year. Together, this is a period of approximately 20 months. The Legislature might vote to change one of more of these new statutes, during this period, but the time when it took effect could not be before July 1 of the second fiscal year following passage. Powers of the ConventionThe convention should have the authority to set its rules, procedures, schedule and organizational structure, except that the Task Force should set a beginning date that allows sufficient time for adequate discussion and development of a plan and a closing date to conform with constitutional requirement for public review of constitutional amendments.Percentage of Votes Required During the ConventionThe percentage of votes required to approve various tax reforms proposed in committee, or to the convention delegates as a body, should vary. A simple majority of committee members should be sufficient to bring recommendations to the whole body. A somewhat higher proportion should be required for approval by the delegate body to include a recommendation in the final plan. And an even higher proportion should be required to signify delegate approval of the overall reform question to be placed on the ballot. 55% and 60% would be acceptable, but no more than 65% seems a reasonable maximum on the final vote on the package. The recommendation that a higher proportion of votes be required for approval of the plan is based on the reality that the proposed plan must be voted upon and approved by citizens. A failure to achieve more than a bare majority will undermine the chances for voter approval. It will be important that delegates advocate for the plan, and the larger the number of delegates who oppose or are not advocates, the poorer the case for citizen approval. Cost of ConventionThe $4 million appropriation to fund a convention included in the2003 legislation was insufficient to pay for the elections and convention itself. The cost of a special election is high, but the League believes it is essential. Some type of remuneration is essential and must be included to assure greater diversity of delegates and wider opportunity to become delegates. Data, Statistics and MaterialsIt is essential that delegates have available to them in a timely manner the background materials required for understanding and discussing property tax issues in relation to state taxation and to significant differences in their burden and effect on municipalities, school districts and counties. If approved by voters in 2005, with a convention in summer 2006, the interim period should be used to have existing NJ state departments compile statistics, bring together existing data, and prepare reports so that it is ready. The convention will require staff to respond to information needs as they arise during the convention. APPENDIXThe League of Woman Voters of New Jersey has been an “amicus curiae’ in the Abbott cases from the 1980s up to and including the major NJ Supreme Court decisions through 1998. It was the League’s amicus curiae in 1997 that provided the constitutional basis and the missing “record” on school construction that resulted in the Court requiring the State to pay 100% of school construction costs in our poorer urban school districts. The blessing of Abbott is that it is finally raising the level of teaching and services, and hopefully facilities, for children in poor urban schools. Educational results are beginning to show after the Court finally forced the state to actually meet its responsibility to provide greater fiscal resources and improved teaching. The tragedy of Abbott is the failure of elected leaders to recognize that the New Jersey Constitution’s promise of a “thorough and efficient education” required that they provide the funds to create good-citizen-producing, good-worker-producing, high-quality education in other poor non-urban district. In fact, in all NJ public schools. The school funding system mandated by the state results in a system that allows wealthier districts to spend at the level they believe is necessary to provide the quality education that prepares their children to succeed in today’s world. However, the state subjects other school districts to other arbitrary lower levels of spending. The only justification seems to be that the state must pay. However, the state refuses to determine whether or what spending is unnecessary or ineffective in the highest spending districts, a process that would enable it to place legitimate caps on the spending of the wealthiest districts. Until it does so, the state has no rational argument, and no right, to ignore the educational rights of the far larger number of students enrolled in non-Abbott lower wealth, lower spending districts. Yet it continues to deny these schools the fiscal resources to provide the educational programs that would be possible with funding at least the average of spending in wealthier districts, as it does in Abbott districts. The recent passage of school spending legislation (S.1701) further exacerbates the problem of significant differences in per pupil spending among the wealthier and middle-income and poorer districts. The 2.5% cap, or alternative increase in CPI cap, enables wealthier districts with higher per pupil spending to increase spending more than other districts, further increasing existing disparities. October 19, 2004 |
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