TO: Members of the Board of Directors of the Regional Planning
Partnership
FROM: Dianne Brake
DATE: 5/29/02
RE: Policy Committee Recommendation
Today the Policy Committee met to discuss S-478 (Martin, Adler). It proposes a Constitutional Convention whose duty it would be to amend the NJ Constitution and revise existing law which, while revenue neutral in their overall impact, will eliminate inequities in the current system, ensure greater uniformity in its application, reduce property taxes as a share of the overall public revenue, provide alternatives which lessen the dependence of local government on property taxes and provide alternative means, including possible increases in other taxes, of funding local government services.
Although each member of the committee supported the stated goals of the legislation, they did not agree that a Constitutional Convention was the best means to achieve those goals. Problems with the Convention include:
- its questionable constitutionality, since it is the Legislature which is responsible for taxation;
- the fact that it addresses only revenues and not expenditures;
- the cover that it provides for Legislators to avoid grappling responsibly with the budget crisis; and
- the possibility that the Convention could undo parts of the Constitution that we do not want to lose, e.g., its support for affordable housing and more equity among rich and poor school districts.
After much discussion, the Policy Committee decided that RPP should continue its position on property tax reform that we have had in the past. Before a final position is decided, however, staff should investigate two things:
- How and under what circumstances can a Special Session of the Legislature be convened?
- What is the viability of resurrecting and possibly revising the 1989 SLERP Commission Report to reform the property tax system to achieve our desired outcomes?
The Committee wants RPP staff to emphasize our history on this issue. Since its founding in 1968, RPP has advocated reforming New Jersey's current tax structure because of its impact on land use and the overall quality of life in this region. Our work indicates that Smart Growth will be substantially impeded without tax reform.
Over-dependence on local property taxes has made communities shun residential development in general and affordable housing in particular. It also encourages the "ratables chase" for clean commercial development. This causes sprawl to spread further into rural areas, causing the loss of farmland and open space, a labor shortage, increased housing costs, increased commute times and traffic congestion. It also draws the economic base away from the cities, increasing the concentration of poverty, non-performing schools and other indicators of urban distress. This distress can be seen to be creeping into the inner ring suburbs, as the economy slips further and further into rural areas, and reducing the ability of existing communities to support services for their population.
But reducing the over-dependence on local property tax as the only objective, without the context of the land use and quality of life goals we support, will not get the results we need. We must continue to advocate reform in which:
- Schools everywhere improve, because cities would have more funding and suburbs could reduce costs by phasing growth to a more manageable rate.
- When city schools improve and city tax rates come down, cities are more attractive to development, thereby enhancing revitalization investment and reducing growth pressure in the suburbs.
- Housing costs go down, as suburbs look more favorably on housing development of various kinds, supporting an adequate workforce, increasing our competitiveness, etc.
- The costs of infrastructure throughout the region come down by reducing the need to duplicate facilities in the suburbs when capacity is available in the cities.
- With less competition for ratables, suburban communities cooperate more readily to achieve common goals, such as corridor planning, natural resource protection, infrastructure construction, and other regional smart growth goals.