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The cap next door

 

New York’s governor this week congratulated "long-suffering taxpayers" on passage of a property tax cap and praised elected officials for their bipartisan effort to enact it. Unfortunately, David Paterson’s message was for the taxpayers, lawmakers and governor of New Jersey.

In our own state, lawmakers seem oblivious to polls that show a large majority of New Yorkers favor a property tax cap. Or they simply do not care.

The New Jersey cap signed into law this week by Gov. Chris Christie, a Republican, in fact is the second one New York’s neighbor has put on the books. In 2007, when Democrats were in control in Trenton, they enacted a 4 percent cap. The new law lowers the lid to 2 percent. It also eliminates many of the exceptions and waivers in the 2007 law that created, in Mr. Christie’s words, a "Swiss cheese cap."

The "hard cap" he signed is not inflexible, however. It contains exceptions for certain expenses-capital expenditures and required debt service payments, pension and health benefits, and costs incurred in a state of emergency-and allows voters in each community or school district to approve tax hikes that exceed the limit.

The pact Mr. Christie reached with Democrats, who control New Jersey’s legislature, also addresses a chief concern of tax-cap opponents: the relentless rise of local government costs. They agreed to act swiftly on his "tool kit" plan dealing with collective bargaining and civil service reforms, teachers’ contribution to health care expenses (union members currently pick up none of the cost) and pension reform.

No doubt, some will say New Jersey managed to enact a property tax cap because it is not like New York. True, it’s not: New Jersey has an even heavier property tax burden (its rates are highest in the nation) and this year faced a deficit representing 37 percent of its total budget (also highest nationwide).

In other words, confronted with enormous budgetary problems, New Jersey has chosen to focus on reining in taxes, not raising them. Massachusetts took the same step years ago.

Those facts prompted Gov. Paterson to issue this warning: If Albany once again fails to deliver, New Yorkers "may be forced to look to two (of) our neighbors … to find the property tax relief they deserve here."

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