The Senate this week passed two property tax measures. A third measure, however, stalled over the issue of giving county school superintendents stricter oversight of local school district spending. Also, the Assembly is expected to vote January 29 on legislation to cap annual property tax increases at 4 percent per year and provide tax credits of 10 to 20 percent for homeowners with household incomes under $250,000.

Lawmakers are struggling to pass comprehensive property tax reform so Governor Jon Corzine can include the tax credits in his proposed budget, which will be presented in late February. Legislators, meanwhile, have met fierce resistance to many reform proposals from municipalities, school boards, teachers, school administrators, and public employee unions.

On January 22, the Senate passed an amended bill that would establish a commission to recommend town mergers and consolidation and, on January 25, approved legislation that would create a State comptroller position. Both measures are expected to be approved by the Assembly and sent to Corzine on January 29.

The three bills are aimed at controlling local government spending, which is the driving force behind New Jersey’s highest-in-the-nation property taxes and 7 percent annual increases. While NJBIA supports these measures as improvements over the current situation, the Association is very concerned that recent changes will water down their effectiveness in controlling local government spending and making property tax relief sustainable. Here is a detailed look at these measures.

A-15 (Wisniewski, Gordon)/S-12 (Smith, Sweeney) would create the Local Unit Alignment, Reorganization, and Consolidation Commission to recommend mergers and shared services among the State’s 566 municipalities and 186 fire districts. Those recommendations would then be put to a referendum in the affected municipalities, and if a majority of voters approve the referendum in each municipality, those municipalities would be regionalized as the commission recommended. As originally conceived, the measure was to include provisions that would withhold State aid from municipalities where voters did not approve the commission’s recommendations. In the current bill, however, towns would still have to vote on the commission’s recommendations, but there would be no financial penalties if the referendum fails.

A-2 (Watson Coleman, Burzichelli)/S-15 (Kenny) would establish the Office of the State Comptroller to audit State spending and contracts. A-2, which passed the Assembly on January 8, would authorize the State comptroller to audit local governments and school boards as well. However, on January 25, the Senate amended the bill to only review local independent audits and to only conduct a local audit when an independent audit uncovers material deficiencies. The Senate version also exempts local land purchases from the financial transactions that a comptroller would be authorized to investigate. Without the authority to tackle local government spending, a comptroller would largely duplicate activities already performed by other agencies.

A-4 (Roberts, Wisniewski)/S-10 (Smith), which would make it easier for municipalities and school districts to voluntarily share services, is stalled. Many legislators have objected to provisions of the measure that would allow county superintendents to play a greater role in providing administrative services to local school districts and give them greater oversight powers over local school district spending.

For more information, contact Chris Emigholz.

Good News, Bad News for New Jersey in National Surveys—New Jersey won good marks for economic development, according to an analysis by a national entrepreneurial group, but still has one of the worst business tax environments in the country, according to a survey of the nation’s chief financial officers.

CFED, a nonprofit organization formerly called the Corporation for Enterprise Development, gave New Jersey a grade of B in its 2007 Development Report Card for the States. The report card uses 67 measures to provide a relative, state-by-state assessment of economic development, assigning grades in three main areas: performance (economic climate for a wage-earner), business vitality (economic climate for a business), and development capacity (how a state is positioned for the future). New Jersey received a B in each area. New Jersey earned high marks for job quality, earnings and business access to skilled workers and capital, but its overall grade was dragged down by weak job creation, business closures, aging infrastructure, and high living costs.

In CFO Magazine’s 2006 State Tax Survey, on the other hand, the nation’s chief financial officers (CFO) ranked New Jersey’s business tax environment the second worst in the nation. The ranking is actually an improvement over the previous survey, released in 2004, which said New Jersey had the worst business tax environment in the nation. CFOs also ranked New Jersey revenue-department policies as having the most negative influence on a company’s decision to locate or expand here.

Meet the Decision Makers Series Begins February 21 with Labor Commissioner David Socolow—NJBIA will kick off its Meet the Decision Makers breakfast series on Wednesday, February 21, with David Socolow, Commissioner of the NJ Department of Labor and Workforce Development (DOL). Find out what is in store for employers on issues such as wage and hour enforcement, unemployment insurance, temporary disability insurance, workers' compensation, workplace training programs and worker safety. Don't miss this opportunity to talk directly with Commissioner Socolow about your ideas or concerns. Register for this event now. Mark your calendar for these upcoming Decision Makers breakfasts:

Friday, March 23
State Treasurer Bradley Abelow

Wednesday, April 11
Governor's Chief of Staff Thomas Shea, Chief Counsel Ken Zimmerman, and Policy Counsel Heather Howard

Each breakfast will be held from 7:30 a.m. to 10:00 a.m. at Forsgate Country Club in Monroe Township. The cost to attend each breakfast is $69 per person for NJBIA members and $105 for nonmembers. For more information, contact Stacy Wichner at 609-393-7707, ext. 213. Call Sherry Esteves at ext. 219 to become a high profile sponsor.

Raise Your Visibility. Become an Event Sponsor—Golf & Tennis Day. NJBIA's Meet the Decision Makers series. First-rate events like these offer your company an excellent opportunity to reach their target audiences and heighten their visibility as an event sponsor. You can learn more about becoming an NJBIA sponsor online or contact Sherry Esteves at 609-393-7707, ext. 219.