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Home Rule Versus Consolidation

The Joint Legislative Committee on Government Consolidation and Shared Services held its first meeting on 8/806. Senator Robert Smith the Committee’s Co-Chairman said “home rule has lead to New Jersey having the highest property tax burden of any State in the United States”. However, he said that their is no single silver bullet to solve New Jersey’s excessive property tax burden. Nevertheless, the committee is charged with coming up with a legislative action plan to be submitted to the Legislature.

Senator Smith believes New Jersey should look to states that rely on county school districts, instead of the local administration in New Jersey that has produced more school districts than towns. He called it the most inefficient system in the country. In an August 9, 2006 Asbury Park Press article called “Sharing Services May Not Pay Off”a New Jersey School Board Association spokesman said the current law provides that if school districts merge, the larger district’s union contract is to be the one used — even if its salaries are more generous and there fore costlier to taxpayers.

Testimony before the committee reported that the State has 1,389 different entities that can levy property taxes, including municipalities school districts and fire districts. What struck me after listening to the testimony given to the committee about the history of consolidation in New Jersey is the disjointed, fragmented, locally driven parochial measures that have dragged the State into its current State of law and practice regulating consolidation.

Ultimately, I believe there is not enough political courage, legislators realize that forcing consolidation will likely cause them to lose their job, This is especially true if the State uses the stick approach and forces consolidations that at best “over time” saves only 10% to 20% in costs and therefore reduces property taxes by a like amount. What is worse is that consolidation in some cases could wind up costing more!

I am waiting for the discussion to commence on which local municipal services are essential local government functions and at what cost. Further, if they do not belong at the municipal government level then which government level should fund them? I believe New Jersey will shift certain local government and school functions to a higher level of government in the State and establish appropriate cost and service levels. District schools consolidated at the county level, the prosecutor’s office, county jails, county school superintendents, moved to the State level. But, this represents a very daunting task for a legislative committee to assemble into a legislative action plan by November 15, 2006.

Why do New Jersey residents cling to the concept of home rule? It is because they like their local school whose teachers and principal they know. They like knowing the people who serve on their local planning and zoning boards, they like their local recreation programs and fear that under consolidation they might be spirited off to some other venue if local control was lost. Some residents in small towns have built up a report with their local public works staff to get their roads plowed first … so that their husband can get to work on the midnight shift. Other like the patrol car coming by once a day, or the fact that the local police are the first to arrive when there is the need to call an ambulance.

These are the items that build character into a community that people want to retain. I believe that generally people do not care who the business administrator is, or who the assessor is, what office handles the collection of taxes (but lets not have to drive to the county seat to pay our quarterly property tax bill). I do not believe people generally care about whether their town has civil service or not. I would venture to guess most residents do not even know which departments in their town are governed by civil service rules. Home rule has its virtues but at what cost will property taxpayers say the hell with home rule. At some point coercion to consolidate is not coercion if it is the will of the people said Senator Smith of the committee. Has the property tax burden on home owners in New Jersey reached the breaking point so that New Jersey legislators and the governor will favor the big stick approach of mandatory consolidation?

Basically, property taxpayers want services they can afford, service levels that will maintain the character of their towns that support the values incorporated in their homes which is their largest source of wealth in most cases. People also want their services delivered in the most economical way possible. Senator Smith said to reduce New Jersey’s average property tax on home owners to the national average will take a very big vision answer.

Tom Hester in an Asbury Park Press article on 7/3/06 called “Some In N.J. May Be Big Loser”said a 2003 Rutgers University study found that reducing the New Jersey’s 616 school districts by half would save $365 million after four years, doing little to cut the $20 billion collected annually in the New Jersey property tax. Hester went on to quip that the State has set aside $600 million in the current year’s State budget to cut property taxes, but it would have to cut property taxes by $6 billion to put itself at the national property tax average for the average home owner.

Senator Joseph Kyrilos, Jr. noted at the committee meeting that in New Jersey 50,000 people have ben added to the government payroll over the last five years while 120,000 business jobs have been lost. I think his point was you have to be careful about trying to extract more taxes from the business community. Others at the committee meeting noted that property taxes in New Jersey have risen three times faster than personal income in New Jersey over the last five years.

Testimony at the committee hearing from administrators in the front line of consolidating local government services said that consolidation is not the panacea to New Jersey’s excessive property tax burden. Those administrators said after 30 years of attempting various consolidation laws, consolidation is just a finger in the dam. Further testimony at the hearing reported that New Zealand went through a government upheaval and accomplished a 20% reduction in local government employees and reduced their over 600 government units to 80. Apparently the lesson from New Zealand is to go after the big buck items. If consolidation is just done on the margin then it will represent nothing but a castle of sand — a lot of work undone in a moment with the next wave of property tax increases.

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