Senate President Richard Codey and Assembly Speaker Joseph Roberts recently promoted their ideas on property tax reform while declaring changes to the fairness clause of the New Jersey State Constitution a dead issue. Codey and Roberts also took questions from the audience of more than 250 NJBIA members at the Association’s September 27 Meet the Top Two Legislative Leaders breakfast. The two leaders covered a wide range of topics, including economic development, health insurance and energy.

But with four joint legislative committees investigating possible property tax reforms, the issue of what to do about New Jersey’s highest-in-the-nation property taxes took center stage. An issue of particular concern to business is the fairness or uniformity clause of the State constitution. It has always required that business and residential property be taxed at the same rate, but some policymakers have suggested changing it. Both Codey and Roberts said they had no intention of taxing businesses at a higher rate. “I’m a licensed funeral director, and as far as I’m concerned, (the issue) is in the morgue with a toe tag on it,” Codey said. “It’s not going to happen.”

Roberts said the property tax issue is a “multi-dimensional monster” that defies a single “silver bullet” solution, but must be addressed with a combination of initiatives to provide meaningful tax relief. Local government consolidation, spending cuts, shared services, and public employee benefits reform all must be part of the solution he said. Codey added that past solutions like increased property tax rebates, more state aid to schools and municipalities, and assumption of local costs have not yielded long-term results. “Obviously, more of the same will not work.”

At the top of the list are consolidation and shared services. The hundreds of municipalities, school districts, and local government entities that are supported by local property taxes create a wasteful, inefficient system that drives up costs. Roberts said that consolidation would require more than incentives to encourage towns to merge. Those that refuse to consolidate should face an economic cost as well. “It can’t just be a carrot approach in my opinion. There has to be a stick as well,” he said. Codey said school districts had to dramatically increase the use of shared services. Codey’s home town of West Orange shares a tax assessor and health officer with other communities to save money. Yet “I can’t give you any examples of school districts that share services,” Codey said.

The cost of public-employee benefits is also on the list of needed reforms, the two leaders said. Most local government employees get their health benefits through the State Health Benefits Program at very little cost to them. With health insurance costs skyrocketing, changes will have to be made in the future. Both said they envisioned a benefits system that would look more like the private sector. “More often than not, people like you (business people) are ahead of the curve on this stuff,” Codey said. Roberts added that Governor Jon Corzine moved new NJ Transit employees into a 401k-style pension plan, and he would like to see more of that.

In a related issue, Codey said a healthcare tax proposed in S-477 (Sweeney), pending before the Senate Budget and Appropriations Committee, would not advance soon. But Codey said he is committed to tackling the issue that the bill addresses. The measure, which NJBIA opposes, would require large companies to spend at least $3.30 per hour, per employee on health benefits or pay the difference in a tax to the State. The bill targets companies that some claim do not spend enough on health benefits for their employees. Codey said he would seek a solution that is fair. Roberts called the bill well-intentioned but too narrowly focused. He said he is looking at many of the reforms enacted by Massachusetts, which enacted comprehensive health insurance reform earlier this year.

Sales Tax Extension Takes Effect Sunday, October 1—A new law enacted in July extends New Jersey’s 7 percent sales tax to many products and services that were previously exempt. For a detailed description of what will now be taxed, visit the New Jersey Division of Taxation’s Web site or call the Customer Service Center at 1-866-698-9065, Monday through Friday, 8:30 a.m. to 4:30 p.m.

Among the items now subject to New Jersey sales tax are:

• storage space;
• tanning services, massage services and tattooing;
• investigation and security services, including armored car services and burglary and fire alarm installation;
• information services;
• limousine services;
• initiation fees, membership fees or dues at health clubs, sporting clubs or shopping clubs;
• parking, except residential parking, and employee parking where the employer owns the lot.;
• magazines and periodicals;
• digital property, including electronically delivered music, cell phone ringtones, movies, books, audio and video works and similar products;
• prewritten computer software delivered electronically;
• clothing laundering, dry cleaning, tailoring, weaving, and pressing;
• installing floor coverings; and
• landscaping services

NJBIA to Honor Nine Companies at Awards for Excellence Dinner, Tuesday, October 17—NJBIA will honor nine companies for their outstanding contributions to job growth, the environment, their employees and communities at NJBIA's 2006 Awards for Excellence Dinner on Tuesday, October 17, at the Hilton East Brunswick (just off exit 9 of the NJ Turnpike). The event will begin at 6:00 p.m. and will include a reception, dinner and the awards presentations. The price is $149 per person. Tables of ten are available. To register, call Stacy Wichner at 609-393-7707, ext. 213, or register online now. To be a dinner sponsor, call Sherry Esteves, ext. 219.

October 25 Seminar: Hot Legal Topics for Employers—Sexual harassment, employee privacy, age discrimination. They're more than just topics in your employee handbook, they're legal landmines. Step on one and you and your company could be in big trouble. That's why NJBIA is offering its half-day seminar, "Hot Legal Topics for Employers." From 8:30 a.m. until 12:30 p.m. at the Holiday Inn in Tinton Falls (1 mile off Exit 107 of the Garden State Parkway). Register online for this great event or contact Katie Wittkamp at 609-393-7707, ext. 239.

November 3 Seminar: Selling to the Top: Doing Business with Top NJ Companies and State Government—Find out how you can sell your goods or services to State government and top New Jersey companies at this half-day seminar. Get practical tips from purchasing agents. Government officials will tell you how to become a certified minority- or women-owned business; you will also be able to register as a qualified business on the spot. The event will be held from 8:00 a.m. until 12:30 p.m. at the Sheraton Newark Airport Hotel. The cost is $109 per person for NJBIA members and $139 for nonmembers. Register online now, or call Katie Wittkamp at 609-393-7707, ext. 239. To become a high-profile sponsor, call Sherry Esteves, ext. 219.

Mark Your Calendar for These Other NJBIA Events:
How to Comply with State Environmental Regulations, November 15...
NJBIA Public Policy Forum, December 12.

Raise Your Visibility. Become an Event Sponsor—The Awards for Excellence Dinner. NJBIA's Public Policy Forum. First-rate events like these offer your company an excellent opportunity to reach their target audiences and heighten their visibility as an event sponsor. Learn more about becoming an NJBIA sponsor by contacting Sherry Esteves at 609-393-7707, ext. 219.