TRENTON — With Gov. Chris Christie’s signing of a landmark property tax cap bill Tuesday, New Jerseyans will get to decide if their towns and school districts can go beyond the law’s limits to spend extra cash on everything from hiring police officers to buying a new trash truck. The 2 percent ceiling, lauded by Christie and lawmakers as...
NJ Gov. Chris Christie signs the law limiting annual property tax increases to 2 percent. TRENTON — With Gov. Chris Christie’s signing of a landmark property tax cap bill Tuesday, New Jerseyans will get to decide if their towns and school districts can go beyond the law’s limits to spend extra cash on everything from hiring police officers to buying a new trash truck.
The 2 percent ceiling, lauded by Christie and lawmakers as a turning point for fiscal discipline, will force towns and schools to limit property tax collections like never before.
But taxpayers will have to wait until next year before any of these sweeping changes actually take effect.
The caps won’t have an impact on residents’ tax bills this year because town and school budgets have already been passed with the existing 4 percent limit. And state officials are still hammering out the details on exactly how voters will get to make their voices heard.
"It’s time to put it in the hands of the people," the Republican governor said, flanked by supporters at a firehouse in Hamilton Township. "The more voter involvement we have in these kind of things, the better off we’re going to be."
While it falls short of the tougher limits Christie wanted, the new law addresses voters’ top priority and could cause a fundamental shift in how New Jersey pays for government. In Massachusetts, the governor’s original model for a voter override, residents have decided whether to pony up higher taxes for everything from libraries to paving over potholes.
Those scenarios and hundreds of others could play out across New Jersey’s 566 towns and nearly 600 school districts.
"This is going to be an extraordinary experience for people at the local level," said Assembly Speaker Sheila Oliver (D-Essex), a reluctant partner in the compromise legislation shaped by Christie and Senate President Stephen Sweeney (D-Gloucester). "They will go to the polls and vote for an override in some instances, but that’s not going to be the case in every community."
Wrinkles remain to be worked out before residents can take matters into their own hands. Still in flux is the governor’s 33-bill "toolkit" designed to help local governments cut expenses, mostly through lowering public employee costs.
The final shape of that package could determine when local referendums are held on whether to override the property tax cap, Christie and lawmakers said Tuesday. Currently, voters’ only say in property taxes is during local school elections, which Christie wants to shift from April to November.
After the new cap goes into effect in January, referendums on next year’s school and municipal budgets could be scattered throughout the year.
While the law only permits exceptions for pension and health insurance costs, increased school enrollment and debt payments, there are no details yet on another provision that would allow tax increases over 2 percent: cases of a "state of emergency."
Christie and Sweeney said that will not become a catch-all excuse to circumvent the voters.
"We’re talking about the kind of natural disasters that are emergencies — not like, ‘It’s an emergency, my teacher needs a raise,’" Christie said.
Sweeney said even layoffs of police officers would not be considered a state of emergency under the new law, and predicted such decisions would go to the voters.
But police and fire union leaders warned that would not preserve public safety, one of towns’ costliest services.
"If you’re really concerned about the taxpayer, then let’s at least keep them alive. Let’s keep them safe," said Bill Lavin, a firefighter union official.
Lisa Fleisher contributed to this report.