At a special July 28 joint legislative session, Governor Jon Corzine called on the Legislature to cap annual property tax increases at 4 percent, rein in public employee pension and health benefit costs, and create incentives for local government units to share services.  Corzine’s initiatives were part of a comprehensive property tax reform plan that stressed spending cuts to trim New Jersey’s highest-in-the-nation property taxes.
                                                       
Legislators in the Assembly and Senate then passed two concurrent resolutions: ACR 1 (Roberts, Watson Coleman)/ SCR 1 (Karcher, Bryant), which would dedicate half of the sales tax increase towards property tax relief; and ACR 3 (Roberts, DeCroce)/SCR 2 (Codey), which establishes four joint legislative committees to review different aspects of the property tax problem and provide recommendations for legislative action by the end of the year.

In his address, Corzine proposed a $1.6 billion fund to provide direct property tax relief to senior citizens and middle class families, and then called for a five-pronged approach to tackle what he called the root causes of high property taxes.  Corzine called on the Legislature to:

• modernize the pension and health benefit program by creating a defined contribution program for new public employees, raising the retirement age from 55 to 60, and requiring public employees to share in the cost of health benefits;

• increase shared services by providing incentives to school districts and local governments;

• reduce State debt by conducting an assets and liability study that would investigate the possibility of leasing state assets, selling naming rights and joining in other public-private partnerships to raise capital;

• modernize the tax code by giving local governments a limited ability to raise revenues from new sources;

• ensure sustainability and accountability by capping increases in property tax bills at 4 percent per year for four years and creating an appointed State Comptroller position in State government.

While much of the focus of property tax reform is on homeowners, NJBIA believes it is a key business issue as well and has supported a special legislative session.  In 2005, New Jersey employers directly paid an estimated $4.9 billion in local property taxes (25 percent of the total), with most others absorbing rising property tax costs through their leases and rents.  Rising property taxes contribute to what is already one of the highest costs of doing business and one of the worst tax environments in the nation.  Reforming the property tax system must focus on a reduction in government spending instead of merely shifting property taxes to other taxes.

NJBIA has developed a series of recommendations to reduce the spending that forces property taxes up.  These include requiring all active employees and retirees to contribute 20 percent of the cost of their health insurance, raising the retirement age from 55 to 60, consolidating school districts in towns that have both a K-8 school district and a regional school district, and reforming the school funding formula.

NJBIA staff will also work with the four joint legislative committees to develop workable solutions.  Each committee will focus on a different aspect of reform—school funding, government consolidation and shared services, public employee benefits reform, and constitutional issues, including a citizens constitutional convention.  For more information, contact Art Maurice at ext. 247.

New Law Prohibits Employee Intimidation—Employers are prohibited from requiring employees to attend meetings or participate in communications about religious or political matters under a new law signed July 26 by Governor Jon Corzine.  The law, known as the Worker Freedom from Employer Intimidation Act, specifically refers to political party affiliation and decisions to join or participate in any political, social or community activity.

Before the law was signed, NJBIA-backed amendments were adopted that will permit employers to send communications to employees about social or community activities provided they notify the employee of her or his right to refuse or disregard the communication.  Since the term “communication” is very broad, NJBIA was concerned that employers could unintentionally run afoul of the law simply by sending emails about a United Way or other charitable campaign.  To further protect employers, Corzine issued a signing statement that the law did not prohibit sending an e-mail about a particular activity, provided employees are free to delete or disregard it.

For more information, contact John Rogers at ext. 209.  Go here to view the entire signing statement.

Meet NJ's Top Two Legislative Leaders—Hear directly from New Jersey's two most powerful legislative leaders, Assembly Speaker Joe Roberts and Senate President Richard J. Codey. This event will be held at the Forsgate Country Club in Monroe Twp. (just off exit 8A of the NJ Turnpike) on Wednesday, September 27 from 7:30 a.m. until 10:00 a.m. Plenty of time will be set aside to answer your questions. Don't miss this informative networking event. Cost to attend is $69 per person for NJBIA members and $105 for nonmembers. For additional information call Katie Wittkamp at 609-393-7707, ext. 239, or register online. To become a sponsor, contact Sherry Esteves at ext. 219.