Gov. Christie issues conditional veto of property tax bill in deal with N.J. Dems

Above, Gov. Christie and Senate President Sweeney announced the details of the property tax cap deal on Saturday

Amanda Brown/The Star-LedgerThere was an air of conviviality in the air during a press conference where Gov. Chris Christie spoke about the property tax compromise. Lt. Governor Kim Guadagno, Senate President and Steven Sweeney joined him in his office at the Statehouse in Trenton for the announcement.

TRENTON — Gov. Chris Christie today recommended changes to a bill that would tighten the cap on annual property tax increases, formalizing a compromise reached on Saturday with the Legislature's top Democrat.

The Republican governor issued a conditional veto of a Democrat-backed bill, which had sought to lower the cap on towns and schools from 4 percent to 2.9 percent with several automatic exceptions and others that could be granted by the state. In his veto message, Christie outlined changes worked out in a deal with Senate President Stephen Sweeney (D-Gloucester): Setting the limit at 2 percent with automatic exceptions for health care and pension costs, debt service payments, and emergencies such as severe storm damage. School districts could get exemptions for unanticipated increases in student enrollment.

If a town wants to raise taxes above the cap in other circumstances, voters would have to approve it by referendum with a bare majority — 50 percent plus one vote — rather than the 60 percent supermajority Christie first wanted.

The governor's original proposal was for the Legislature to put a question on the ballot in November that would create a constitutional amendment capping property tax growth at 2.5 percent, exempting only payments for debt service, unless local voters wanted to exceed it. But Christie and Sweeney both made concessions in the agreement announced Saturday, the third day of a contentious special legislative session following passage of Christie's $29.4 billion budget.

"I remain convinced that a constitutional amendment imposing a cap on increases in tax levies by local government units will provide the surest means to rein in skyrocketing property tax costs," Christie wrote today. "However, the Legislature has sent me Senate Bill No 29 with its 2.9% cap and numerous exceptions. Through the recommendations contained in this conditional veto, we can achieve a hard 2.0 percent statutory cap with direct voter involvement."

The amended bill will have to pass both houses of the Legislature to become law. Sweeney predicted a landslide when the Senate votes Thursday.

"I would be surprised if it's not 40-0," Sweeney said today. "What we came up with is a compromise that's good for the taxpayers."

Assembly Speaker Sheila Oliver (D-Essex), who was not involved in Saturday's deal, said earlier today that the Assembly will not stand in the way of the compromise but she wanted to discuss additional concerns with Christie. The Assembly Budget Committee is scheduled to examine the 2 percent cap at a meeting Wednesday morning.

If enacted, the plan would be the state's most comprehensive effort yet to stem sky-high property taxes, consistently cited as the most important issue by New Jersey voters. For residents, property taxes have grown from an average statewide of $4,239 in 1999 to $7,281 last year. Democrats say the existing 4 percent cap has made a dent, shrinking average increases to 3.3 percent last year from 7 percent earlier in the decade.

Josh Margolin contributed to this report.