Will Christie's proposed 2.5% annual cap on property taxes help?
Local officials grappling with the immediate impact of cuts in state aid haven't spent much time yet contemplating the bigger-picture change on their horizon — a lower, harder cap on property taxes.
A 2.5 percent annual limit on growth in property taxes, eliminating many of the exceptions now permitted under a 4 percent cap, is the signature item in a so-called "tool kit" that Gov. Chris Christie wants put in place this year by the Legislature and then considered by the state's voters as a constitutional amendment in November.
And that has lawmakers and their staffers poring through the experiences in other states with similar caps, such as California, Colorado and Massachusetts.
Republicans say they're eager to impose the cap, and Democrats acknowledge the prospect sounds appealing. But the idea has pitfalls, such as creating an economic disparity between wealthy towns where voters would approve proposals to exceed the cap and struggling cities where voters wouldn't. Democrats — who hold the majority in the Legislature — say they're interested but want to take it slowly.
Christie compares his plan to Proposition 2 1/2, which since being approved by voters in Massachusetts in 1980 reduced the state's property tax bill from the nation's third highest to its 33rd highest. It would restrict growth in property taxes to 2.5 percent and stop putting certain costs, such as pension contributions, outside of that limit. State officials would no longer be allowed to grant waivers allowing growth above the cap, although local voters could do so in a referendum.
"It can be done," Christie said. "We have to impose discipline."
The difference between the current 4 percent cap and the proposed cap would be significant, even setting aside the impact of the exceptions now allowed. Compounded over the course of a decade, $100 would