Passing new bucks?
Tough choices, or false choices?
Given the lack of alternatives open to municipalities, Mansfield’s Monzo complained, that the new cap tied his hands: “There’s no other way to raise money.”
But Roberts of Gov. Christie’s office said that was exactly the point: “When you have a cap on revenue, then you’re going to have to make difficult choices [including] service reductions and layoffs, and shared services,” Roberts said. “The intent of the property tax cap is to say, ‘look, a lot of this is not taking place at the level we would like.’ It’s going to force changes at the local level.”
What about municipal consolidation?
While local officials were prepared to speak about the need for imagining alternatives to the current relationship between the state and municipalities when it comes to levying taxes, they were less open to a different kind of change that Governor Christie has proposed.
He has argued that many of New Jersey’s 566 municipalities need to share services or to consolidate into larger entities. The current system, Christie has argued, creates waste and inefficiency.
Though some cities and townships have begun sharing some services, consolidation was not under serious consideration by any of the municipalities contacted for this story.
Roberts also said that instituting the referendum requirement was intended to make it harder for municipalities to get waivers from property tax caps. He called the old system, where waivers were granted by the Local Finance Board, “a cap without a cap.”
Some local officials, however, argue that the choice between raising property taxes and cutting services is a false one, with other potential structural changes being ignored.
“Why can’t we have local income taxes, like in Pennsylvania?” asked Mansfield CFO Joseph Monzo.
Howlett agreed that other local taxes would be one solution. “New Jersey is strange, because there are a lot of pipes in to the state government, but only one spigot back [to the municipalities],” she said.
Howlett also pointed out that tax policy is set by the state government, and while forcing municipalities to cut services, the Christie administration has refused to make efforts to wean the state off of property taxes, which she said put too great a strain on individual communities.
“The state has to ensure that local governments are not overwhelmed by their responsibility for providing services,” she said.
Monzo agreed. “So, now, the voters have a say in our town budget,” he said, “but the state budget doesn’t get voted on. The county budgets don’t get voted on.”
If they were, he suggested, voters might chose to increase income, sales or excise taxes, to decrease the reliance on property taxes, thereby taking some of the burden off of municipalities. Recent polls also suggest that voters favor instating the “millionaires tax.”
Though Christie has portrayed himself as a proponent of local control, some local officials point out that the tax cap and the referendum process, combined with state policy limiting revenue sources, effectively takes control away from municipal governments. Christie’s office did not respond to a request for comment on this charge.
Roberts did, however, reject the notion that the state might pursue other revenue sources to support municipalities. “To continually go back to the well of trying to increase things on the revenue side and not control things on the spending side is what got us into this problem in the first place,” he said. “We can’t talk exclusively about revenue.”
But every town that’s seeking a referendum has already made cuts. “We’re cutting, we’re cutting,” insisted Riverdale mayor Budesheim. “We also need the extra money.”
And why is the conversation exclusively about cuts? Why can’t there be a conversation about revenue, as well?
“We have to get [expenditures] under control first before you talk about taxing people more,” Roberts said.
But when asked what happens when local governments run out of cuts to make, Roberts said, “Well, we’re not there yet.”
The Governor’s office did not respond to a request to identify a minimum level of necessary services beyond which cuts should not be made.