I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Monday, January 17, 2011

Someday My Consolidating Prince Will Come...

Read this article in the Star-Ledger, and you'll believe that consolidating is a floor wax AND a dessert topping:
For years, Howlett said, residents were willing to put up with higher living costs in favor of more generous local services. But now, faced with a stagnating economy, residents are fed up with their property tax bills, consistently among the highest in the nation. A previous Star-Ledger story published earlier this month found that last year the average property tax bill, including county and school taxes, was $7,555, a jump of more than $274 from the previous year, based on taxation figures collected by the counties and reported to the state.
The same analysis found that more than 100 municipalities saw double-digit increases in local taxes, and more than half increased local levies by 5 percent or more.
"I think the frustration is evident," Howlett said.
Yes - with PROPERTY TAXES. What this article doesn't state - and what anyone who wants to understand this issue must know - is that localities are forbidden to collect revenues by any others means than property taxes.

Many other states have local sales taxes or local income taxes - we don't. Given how regressive property taxes are, many middle-class folks may be very happy to switch to a mix a taxes. Of course, that would mean the wealthy pay more. Considering we are #3 in the nation for the number of millionaires, maybe that would be a good thing.
The executive director of the New Jersey League of Municipalities, William Dressel, endorsed the need for towns to share services. But he also called on state lawmakers to address other costs that are largely responsible for tax increases. Major municipal expenditures — including pension costs, health benefits and debt payments — are exempt from the new tax limit, exclusions that leave the door open for future hikes, Dressel said. The loopholes ensure, he said, that sharing services alone won’t allow towns to save enough.
So what are we going to do about that? Continue to accept 10-20% increases annually in health insurance costs? Put together a real plan to have the state make up for its backlog of contributions to the pension?

No - apparently, our betters are just going to push that much harder for consolidation:
Michael Riccards, the executive director of the Trenton-based Hall Institute of Public Policy, wants the state to stop giving aid to municipalities with populations under 70,000 to push them toward consolidation. He also supports a new law limiting arbitrators from awarding salary increases for police and firefighters and wants the state to cut back on funding for inner-city school systems.
As taxes continue to rise in much of the state, and with the advent of the property tax limit, this may be the best time in decades to push towns to share services. But those interviewed largely agreed that against the background of generations of home rule in New Jersey, it won’t be easy to convince residents — or their municipal leaders — to give up local services, even if it might save them money on their quarterly tax bill.
Why should anyone be convinced to consolidate if that won't address the problems of pensions and health care?

I've been pointing to these two links for months now:

NJ ranks 31st in total state and local taxes collected from our own revenues as a percentage of personal income. (Center for Budget and Policy Priorities)

Spending burden is total state and local government spending as a share of total state personal income.
NJ Rank: 40 (Milwaukee Wisconsin Journal Sentinel)

Add this as well:

"Independent analysts concluded we had the highest overall tax burden in America."
The "independent" analysis was undertaken by the national Tax Foundation, well-known for its conservative, anti-tax policy advocacy. A report this year by NJPP however found that New Jersey's tax burden ranks 23rd among states when taxes are considered as a percentage of personal income. It is an important adjustment that ought to be made when comparing a high-income state like New Jersey against other, lower income states like Mississippi or Wyoming.
Folks, let's face facts - we have a high property tax burden, but we are NOT a high spending state relative to our income. If consolidating save us some dough, that's fine - as long as it doesn't diminish services. But hoping for a magical consolidating prince to sweep the state off its feet is just being willfully blind.

We need to collect more revenue by shifting the tax burden off of the middle class and on to the corporations and wealthy individuals of the state. They can afford it, they've been getting a free ride until now, and they aren't "creating jobs" anyway (well, maybe in Mexico).

And my guess is if they had more skin in the game, we might get a few politicians who were actually willing to take on the health insurers. Campaign dollars may actually flow to those willing to take on that fight if it meant saving the rich a few bucks.

UPDATE: If you didn't get the joke (geeze, I'm old):

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