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Tax convention can't neglect runaway spending
Posted by the Asbury Park Press on 08/29/06
BY SEAN KEAN
Homeowners are once again going to their mailboxes this year
to find their property tax bills have gone up by record
amounts. Unfortunately, after five straight years of record
property tax increases, New Jersey families are getting used
to this bad news and the toll it is taking on their finances
each year.
The property tax crisis has been exacerbated by runaway
spending on state budgets. When I arrived in the Legislature
in 2002, the state budget was about $22 billion. This year,
we saw the budget increase another 10 percent to reach the
staggering $31 billion level.
But perhaps there is hope.
Early this summer, the Legislature created a group of four
joint legislative committees to study various aspects of the
property tax crisis facing New Jersey homeowners. The work
by these committees should result in New Jersey homeowners
getting some tangible long-term property tax relief. But if
this year's budget process was any indication, the reforms
proposed will merely shift the property tax burden to some
other type of tax. The problem of spending needs to be part
of the solution.
The four legislative committees are studying school funding,
benefits reform, shared services and the concept of holding
a constitutional convention to implement property tax
reform. I am serving on the Assembly Republican subcommittee
that will be studying and providing input on the
constitutional convention issue.
I have been generally supportive of a property tax
constitutional convention because it will provide the
foundation for the fundamental, structural change necessary
to actually lower our state's reliance on property taxes.
Holding a convention where delegates are elected just one
time for the purpose of lowering property taxes would, in
theory, remove some of the political pressures that exist in
the legislative and executive branches and provide the
flexibility and independence necessary to come up with a
real solution.
However, while the concept sounds good, the structure of any
such convention and the parameters of the discussion would
be critical in determining whether the convention would be
productive or harmful. The key issue is whether such a
convention could explore runaway government spending, but
that is not the only question to be resolved.
There are several dangers we must explore as part of the
joint committee process this summer. One is the possibility
that such a convention could become dominated by special
interests if they are able to control the delegate election
process.
Another problem is that because of the constitutional
requirements for holding a convention and the timeline
involved in getting questions on the ballot for public
consideration, any solution that would result from the
convention would not benefit taxpayers for at least three
years from now.
Finally, and perhaps most importantly, there is the question
of what parameters would guide the discussion at such a
convention and how this would affect any reform plan the
delegates might implement.
Unfortunately, a 15-member Property Tax Convention Task
Force that met two years ago to study this issue recommended
a convention that would ignore the one key component that
could make this process successful: a new approach to how
government spends money.
The task force recommendation would have allowed the
convention to only study revenue questions and did not
permit study of the important spending issues at the heart
of this crisis. This was despite extensive testimony
advocating that both spending and revenue be on the table.
New Jersey has a spending problem at all levels of
government. It has been most evident in recent years at the
state level. The fiscal year 2007 budget included a 12
percent increase in spending over last year's budget. This
came just two years after a staggering 18 percent one-year
increase in spending in Fiscal Year 2005. State spending has
increased by nearly $10 billion in just the last five years.
Because this spending has outpaced state revenues, the
Democratic-controlled Legislature has been forced to close
the gap by increasing taxes and cutting both property tax
relief funds and aid to school districts. This has
contributed heavily to the increased property tax burden in
our local communities.
Any property tax convention that fails to address these
spending issues will be left with only one option: to
increase broad-based taxes or to shift the tax burden. Both
are approaches that have repeatedly failed to provide
long-term property tax relief in the past.
Looking at ways to control spending must be a part of this
process and, if it is, it is my hope that a properly
structured property tax convention could serve as a forum
for finding a long-term solution to this problem.
We must address the property tax crisis once and for all and
we must do so in a comprehensive and permanent manner. The
people of New Jersey shouldn't have to wait for a solution
to this problem any longer.
Sean Kean is a Republican Assembly member from the 11th
Legislative District, which includes 25 towns in Monmouth
County.
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