TRENTON, N.J. (AP) — Gov. Chris Christie has promised to close a loophole in New Jersey’s 2 percent property tax cap law by ending a practice by some municipalities of imposing “user fees” for certain services that are beyond the cap.
Senate President Steve Sweeney is sponsoring a bill that bars cities and towns from charging new fees for services such as garbage pickup to help stay within the mandatory tax cap lawmakers approved in 2010. The proposal would prohibit user fees from being shifted out of the property tax base.
Sweeney’s measure could be introduced in the Legislature as early as Thursday. Assembly spokesman Tom Hester Jr. said Speaker Sheila Oliver hasn’t talked with the governor about legislation targeting the fees, and there is no similar bill being drafted in that house.
Nonetheless, Christie guaranteed a new law would be signed by July 1 while speaking on Townsquare Media’s “Ask the Governor” radio program Monday night.
“The Senate president, the speaker and I are not going to permit the cap to be run around,” Christie said. “I am willing to guarantee you we are willing to pass a user fee prohibition between now and July 1.”
Under the cap, cities and towns are required to craft local budgets that keep spending increases to under 2 percent a year though exceptions are made for pension and health care costs and debt service. The law has helped slow the rate of property tax increases — to 2.4 percent last year — but New Jersey still has the country’s highest property taxes, averaging $7,758 per household.
Bill Dressel, who represents local governing bodies as executive director of the League of Municipalities, said Tuesday he hasn’t seen details of the proposal and is unsure which fees would be included.
If towns are no longer allowed to charge fees for activities such as youth soccer, the programs are unlikely to survive, he said.
Dressel said mayors and other local officials are trying to manage their finances without reducing services, not circumvent the cap.
But Sweeney said a user fee is just another word for tax.
“A user fee for a municipally provided service is just another way of saying tax, and these attempts to get around the property tax cap are disingenuous and detrimental to homeowners,” said Sweeney of Gloucester County.
He said municipalities must do more to control local property taxes, such as sharing more services with other towns.
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