Tuesday, August 01, 2006

No Relief For High Jersey Taxes

From the Star Ledger:

Leap in pension payments to wallop towns

Adding pressure to New Jersey's mounting property tax bills, local government officials learned yesterday they will have to fit more than a quarter-billion dollars in new pension payments into their next budgets.

Pension contributions are scheduled to total $650 million for the local share of payments into the plans that cover retirement benefits for police officers, firefighters and local government employees.

"It's going to have a horrendous impact on municipal budgeting," said William G. Dressel Jr., executive director of the New Jersey State League of Municipalities. "It brings into play more service reductions, possible deferral of capital improvement projects and/or higher property taxes."
...
Between 1997 and 2004, local governments paid nothing into their pension systems, as booming investment returns and a $2.8 billion deposit of borrowed state money left the system overfunded, by accounting standards.

Since then, the systems have fallen billions of dollars into deficit, and the state has billed local governments $1.3 billion in three an nual installments to begin addressing the funding shortfall.

Governor open to idea of municipal sales taxes

Gov. Jon Corzine said yesterday he may support allowing municipalities to impose their own sales taxes to help control property taxes.

During a wide-ranging news conference about his ambitious property tax reform agenda, the governor also said he may consider letting an independent commission pick which school districts or municipalities are prime candidates for combined services.
...
"If local citizens choose other revenue sources to lessen their property tax burden, then who are we in Trenton to tell them they don't have the right to an alternative course?" he said. He specifically mentioned only the possibility of municipal impact fees, which would help offset the cost of services caused by new development.

Yesterday, the governor added local sales taxes to the mix, pointing out that most states allow the practice. A chart by the national Sales Tax Institute in Chicago indicates 35 states, including Pennsylvania and New York, permit municipalities or counties to impose their own sales taxes.
...
William Dressel, executive director of the New Jersey State League of Municipalities, said his group has long favored giving towns the option of imposing their own sales taxes. One reason property taxes are lower in other states is not just one tax is being relied upon.

21 Comments:

Anonymous Anonymous said...

VERY NICE a local sales tax.
the locals will have a field day

8/01/2006 05:31:00 AM  
Blogger Metroplexual said...

It will just drive people to buy where the tax is cheaper like the New Yorkers do when they come to Woodbridge Mall. Only in this case PA will look attractive. Their sales tax is virtually the same as our old one.

8/01/2006 05:59:00 AM  
Anonymous Anonymous said...

stop and think of some of the local
pols. would you trust your money with them

good grief,

8/01/2006 06:02:00 AM  
Blogger thatbigwindow said...

With all the small homes being torn down and replaced with higer taxed mcmansions, what are they doing with the increased money from the increase in new construction?

8/01/2006 06:35:00 AM  
Blogger RichInNorthNJ said...

Top 10 answers are on the board...

SHOW ME BUDGET CUTS!!

8/01/2006 07:04:00 AM  
Anonymous Anonymous said...

what's to stop NJ from defaulting on pensions?

Serious question. United Airlines did it. Can NJ's budget deficit somehow serve as the rationale to obtain leverage against the big pensions, double-dippers, and other government-subsidized scalawags?

Consider defaulting on pension obligations the 'nuclear option.' Maybe we could then walk it back from the abyss and recalibrate pensions and retirement benefits to real-world standards.

8/01/2006 08:04:00 AM  
Anonymous Anonymous said...

all i can say is wow... so, the state is going to leave the local town councils with the pension bill... that's truly amazing...

8/01/2006 08:14:00 AM  
Anonymous Anonymous said...

This is insane.

I'm totally with anon 7:02:49. There is no way this would be anything other than a disaster.

Municipalities should have far less ability to tax, that is the only way to keep them from going over the top.

Whatever else the state comes up with to lower taxes, there has to be an absolute cap on what a municipality can tax property at, The tax bill should probably be a fixed percent of a property's value with any additional spending being subject to an up or down vote that cannot be appealed to any forum other than another referendum.

Lindsey

8/01/2006 08:15:00 AM  
Anonymous Anonymous said...

Anon 9:04: Public pension trusts do not come under the same rules as private plans like UAL that pay PBGC "insurance."

When a private plan goes belly-up, the Plan is reverted to the PBGC for administration of remaining benefits, and the promised benefits can be recalculated downward, based on the actual funds in the plan.

Thirty-one states have language in their state constitutions that establish standards for funding and use of public employee pension plans and assets. New Jersey is not one of them..note "default" is not an option.

Some states have created tier system to freeze promised benefits, with newer employees receiving fewer plan benefits. This helped in PA.

http://tinyurl.com/q9unl

Today on NJN, I heard that some proposals include thousands in property relief for this year, and Corzine basically said something like, "what accounting planet are YOU from?"

Pat

8/01/2006 08:20:00 AM  
Anonymous Anonymous said...

Anon 9:04: Public pension trusts do not come under the same rules as private plans like UAL that pay PBGC "insurance."

When a private plan goes belly-up, the Plan is reverted to the PBGC for administration of remaining benefits, and the promised benefits can be recalculated downward, based on the actual funds in the plan.

Thirty-one states have language in their state constitutions that establish standards for funding and use of public employee pension plans and assets. New Jersey is not one of them..note "default" is not an option.

Some states have created tier system to freeze promised benefits, with newer employees receiving fewer plan benefits. This helped in PA.

http://tinyurl.com/q9unl

Today on NJN 8:30 am, I heard that some proposals include thousands in property relief for this year, and Corzine basically said something like, "what accounting planet are YOU from?"
Hear it:

http://tinyurl.com/qlm44

Pat

8/01/2006 08:22:00 AM  
Anonymous Anonymous said...

Pat
8/01/2006 09:20:42 AM

That's pretty interesting but I guess not too surprising knowing how NJ is very protective of there public employees. There's alot of things that are so blatantly over the top it leaves you in disbelief.

The whole idea of police chiefs and other cival service employees cashing in unused vacation, sick and other days upon retirement is ridiculous. How can some carry over 2 weeks vacation from 1978 and get paid at there 2006 pay rate for those unused days. This guy out performed the returns on the S&P over the same period (469,000 to the chief of police in parsippany) My town would have issue bonds to cover this.

8/01/2006 08:54:00 AM  
Anonymous Anonymous said...

Well boys and girls, its finally
happened. They broke the bank
of the nj taxpayer.

just imagine, what the pols have
done to this state.

and its going to get worst.

the teachers,firefighters,cops .
gove. employees want their doles.

and its mandated by law.

last one out turn off the lights,and the AC.

8/01/2006 08:57:00 AM  
Anonymous Anonymous said...

HOW ABOUT MAYBE CUTTING SPENDING??!!!

8/01/2006 10:36:00 AM  
Anonymous Anonymous said...

"what's to stop NJ from defaulting on pensions?"

Beyond the obviously political? Even if it could happen it would wreck the credit rating for the state(which in an odd way may not be such a bad thing is it stops reckless borrowing, but it would stick the taxpayers with higher interest rate payments), and I'd bet that our winderful state courts would find a way to get blood from the stones rather than allow a default--full faith and credit, and all that

8/01/2006 10:39:00 AM  
Anonymous Anonymous said...

Anyone want to make the connection b/w GM's pension problems and NJ?

Today, GM can't make a car worth a damn - so much so that they've taken some models that have had historical prestige (Camaro, Firebird) off the shelves. Instead, we have Chevy Trailblazers and Buick Lacernes???

Continue to offer pensions like NJ has been doing and you end up just like GM. NJ needs to start regulating itself. Case in point: in this heat wave or any other for that matter, most privateers are thinking about cutting costs on energy whether at home or in their business(es). But, walk into any local gov't institution and it's a meat locker in there. I can't help thinking that these gov't institutions just like to have things the way they want them.

NJ seems to need another gov't to regulate itself. Wonder if Corzine has the you know what to do something about it.

8/01/2006 11:32:00 AM  
Anonymous Anonymous said...

the govt employees hate the taxpayer. walk into any townhall
and see how they speak to you.

its burden for them to do anything
for the taxpayer.

the cops for the most part same thing.

this state has generated a
class of entitlement employees
who laugh at the taxpayer.

i'm glad the fraud is now exposed

but lets see if anything can be done or if it will be business
as usual.

and we have a socialist as a gov. so does not seem to be that he will do much.

they will talk the talk,but action
we'll see.

8/01/2006 11:42:00 AM  
Anonymous Anonymous said...

I think the public employees deserve their salaries and it is ok that the unions and mob control the democratic party in NJ. In fact, I think taxes are too low in NJ and the business environment is too business-friendly (isn't NJ the second worst state so there is clearly some room for improvement).

Let's make this a paradise for the democratic party. Minimum wage up, pensions up, taxes up and let's eliminate those awful evil businesses who shamelessly exploit workers. More public housing projects is also useful. And let's not forget to raise property taxes so that the evil capitalist pigs cannot enjoy life too much.

Viva le socialism!

8/01/2006 01:52:00 PM  
Anonymous Anonymous said...

well put , the taxpayers of nj
are hated by the gov. employees.

last one out turn out lights
and the AC.

8/01/2006 04:14:00 PM  
Anonymous Anonymous said...

Look, politicians are in the business of being re-elected, not governing. Until we start electing people ready to act in the public interest, we will get a lot of doublespeak and no true reform. Everyone wants taxes to drop, but don't want to bear the pain. They laughed at Jimmy Carter in his sweater telling us to turn down the thermostat, but he was right. Corzine is right too--there is no money to provide "thousands" in property tax relief. At this point I would settle for some truth-telling, and a shared commitment to fixing the problem at its root. I pay 2.5% of my gross salary in state income tax and 13% in property tax. That is frankly, asp-backwards, and about as regressive as it gets.

8/01/2006 04:34:00 PM  
Blogger StonePearl said...

Governor open to idea of municipal sales taxes
Gov. Jon Corzine said yesterday he may support allowing municipalities to impose their own sales taxes to help control property taxes. >>>

Oh my good God.
hahahahahahahahha
iM LITERALLY HAVING A LAUGHING FIT.
Oh please i just want OUT of this nutty state.
can't take anymore insanity.

8/01/2006 05:47:00 PM  
Anonymous Anonymous said...

Get the tube of KY and bend over--here it comes!

8/01/2006 07:57:00 PM  

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