Category Archives: tax saving tool

>Sweeney: Gov. Christie’s tools aren’t the sharpest in the shed

>NJ Senate President Stephen Sweeney has written the following article that appears online this morning on It’s a must read for anyone who thinks that Governor Christie’s “Tool Kit” is the be all, end all solution that will control the rise of property taxes in the state.

Of the 33 bills in the Governor’s “tool kit”, Sweeney rightfully points out that some of them overlapped and were combined to form 24 and later reduced again to by the Governor when he finally realized that proposals about higher education would do nothing to lower property taxes, leaving 20.
Sweeney points out that the Legislature has passed 8 of the 20 bills thus far, the 2% cap on property tax increases and arbitration reform for police and fire contracts being the key pieces passed. While 2 other bills dealing with civil service reform and a cap on sick-leave payouts were passed by the Legislature but vetoed by the Governor. Sweeney then goes on to tell how many of the remaining “tool kit” reforms will do little to bring down property taxes.
So the next time anyone has to hear Republicans in Middletown chastise Democrats in Trenton for not acting on the “tool kit” and saying that these reforms are necessary so that they can control themselves from overspending, I think Sweeney’s article should be read into the record and see what comments, if any Tony Fiore, Gerry Scharfenberger or the others have to say:

The governor has blamed everything and everyone for the highest property tax increase in four years. He continues to state that if only his “tool kit” were passed, New Jersey’s property tax problems would magically disappear.

Closer scrutiny of the governor’s kit proves his claims are false and are merely meant to distract from his own culpability in property tax hikes. The governor cut more than $2.4 billion in funding to schools and municipalities last year. That is why your taxes are going up. The tool kit will not make up that shortfall.

There are reforms that must be implemented, such as pension and health benefits reforms, which I have supported since 2006. I am committed to getting those done. But those reforms are not — and never were — part of the governor’s proposed tool kit.

First, let’s have truth in numbers. The governor started by saying there were 33 bills in the tool kit. Actually, there were 24 after items were combined. Now the governor says there are 20, because he finally realized that four proposals dealing with issues at colleges and universities have absolutely nothing to do with property taxes.

The Legislature did pass eight tool-kit items. First was the creation of the 2 percent cap on annual property tax increases, which the Legislature lowered from the 2.5 percent cap the governor initially proposed. Second was arbitration reform for police and fire contracts, which was heralded across the state by local officials as key to reining in property taxes.

Two others — comprehensive civil service reform and a cap on sick-leave payouts for public employees upon retirement — were passed and sent to the governor, who vetoed them. We have no reform in these two areas because the governor chose to kill reform.

Civil service needs to be reformed and modernized, but abolishing it will not lower property taxes. Only one-third of New Jersey towns are bound by civil service rules, and those towns actually have lower property taxes per capita than towns without civil service. Civil service was established to protect against political corruption and nepotism. It is puzzling that the governor wants to completely eliminate this protection.

Sick-leave payouts should be capped, but the governor vetoed a bill to do that because he wants to take away benefits workers have already earned. That may be a nice talking point, but it won’t stand up in court. And it would create a flood of new retirements as workers cash out before the law would take effect. If the governor got his way, this tool would actually cost taxpayers even more.

Two other parts of the tool kit are already in comprehensive shared services legislation I am sponsoring with Assemblywoman Pamela Lampitt and Assemblyman Paul Moriarty, which goes far beyond what the governor envisioned, and which will move through the Legislature later this spring.

These are the only parts of the tool kit that will save you money on your property tax bill. We did them. The handful of remaining bills that the governor clings to won’t save you anything.
One would cap spending on state government operations — which already exists under law, and even if it did not, would have no impact on local property taxes. Another would allow local governments to use furloughs to save money — which they already can do as long as furloughs are negotiated.

Another bill to centralize all power over civil service decisions in the Civil Service Commissioner (read: czar) would only consolidate the governor’s power and do nothing to lower property taxes.

One bill would move school and fire commission elections to November — a move whose total property tax savings, according to the nonpartisan Office of Legislative Service, would be “minimal.”

Others would change the way some employee discipline measures are handled (OLS estimated savings: $140,000), require the mailing of only one sample ballot per household (OLS estimated savings: $1.4 million), and allow municipalities to offset property tax delinquencies against state income tax refunds (OLS estimated net savings: zero).

The governor’s rhetoric does not stand up to simple math. The tool-kit bills that haven’t yet been passed offer no real help from New Jersey’s crushing $25 billion property tax burden.


Filed under 2% cap, arbitration reform, civil service, Gov. Chris Christie, NJ State Senate,, property taxes, Stephen Sweeney, tax saving tool, toolkit

>Governor Houdini

>The following commentary was sent to me by a fellow reader who found it posted over atPolitickerNJ. The commentary was written by NJ State Senate Majority Leader Barbara Bouno.

In her commentary Senator Buono states that Governor Christie should stop trying to be a magician that uses smoke and mirrors to deflect peoples attention away from the real issues facing tax payers. She says that the governor’s magical “toolkit” is not necessarily the whole answer to the property taxes and he should stop pretending that it is because other issues like getting people back to work and creating jobs will do just as much to alleviate the tax burden
than many of the proposals in the “toolkit”.
It’s an interesting read, take a look at it below:
The key to any good magician’s act is to distract the audience from the ruse being played, usually with a flashy object, so they don’t realize that the whole act is nothing more than smoke and mirrors.

In many ways, Governor Christie’s “toolkit” to help control property tax increases is a similar smoke and mirror act. Sure, there are several worthy bills among the 30 or so ideas the Governor proposed. The civil service and interest arbitration reform measures we recently passed will certainly have an impact in controlling some of the main drivers of local government spending as employee contracts are renegotiated down the road.

But many of the other proposals will have little to no effect on property taxes in the short or long term. In fact, the administration has failed to produce cost-saving estimates for most of the Governor’s proposals.

Yet the Governor continues to flash his shiny toolkit around as the sole means for helping towns stay within the new two-percent property tax cap about to go into effect.


Because he is hoping his magic act will distract people from the fact that he has failed to address many of the state’s larger woes – stimulating the economy, putting people back to work – while exacerbating the growing divide between the “haves” and “have nots.”

Our jobless rate remains alarmingly high while the Governor has fought to scale back unemployment benefits. He has staunchly defended tax breaks for the state’s wealthiest residents while cutting the Earned Income Tax Credit for our poorest. Increased New Jersey Transit fees, cuts in after school programs and a general lack of job stimulation ideas are all an increasing attack on New Jersey’s middle and lower income families.

Either the Governor is bereft of financial acuity or simply lacks compassion for the working men and women of this state held hostage by the lingering recession.

A clear example of the former is his dumbfounding claim that Moody’s recent municipal bond downgrade is “a great referendum” on his policies because it means we’re “getting our fiscal house in order.” For a governor to boast about municipalities in our state being downgraded which will increase the cost of borrowing is insane especially when his policies have increased the state’s long-term debt obligation.

Everyone will readily admit that property taxes are one of the most pressing issues facing New Jersey. But for our roughly 400,000 residents looking for work so they can afford to stay in their house, or even buy one to begin with, it is crucial that our public policy agenda succeeds in breathing life into our anemic economy.

In order to tackle the broader challenges we face at a state, we need to focus on economic development and job stimulation. This underscores the contrast between the Governor’s agenda and the democratic led “Back to Work NJ” agenda in the legislature.

We have steadily been advancing roughly 30 measures to make New Jersey a more business-friendly state in order to get people back into the workforce. Many of these bills will bring to life real solutions to address the challenges that have been laid out in ongoing conversations we have had with business leaders throughout the state.

Several measures would modernize our business tax codes to benefit in-state based businesses and small businesses, the latter of which I sponsored. Another bill will expand the program that currently offers grants to businesses to help retain and create jobs, a practical, hands-on measure that will actually put people back to work.

Other components of this package seek to provide tax credits to the biotech industry, to encourage upstart companies to locate in New Jersey. And taking a cue from the successful “Georgia Work$” program, we are looking to create a similar model in New Jersey that would provide the critical training residents need to find work in key industries.

Hopefully the Governor will put his magic act on hold long enough to see the merit in these bills and sign them into law. By putting people back to work, we will be able to help people stay in their homes, generate increased revenue, and fund the vital services needed to keep our state moving forward.

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Filed under Gov. Chris Christie, PolitickerNJ, Senator Barbara Buono, tax saving tool, toolkit

NJPP Monday Minute 7/19/10: Public Employees: Are they overpaid?

State and local government budgets are under severe strain. Rather than blame the world-wide recession, which has caused tax revenues to fall and the demand for public services to increase, politicians want to blame public employees who, they claim, are over-compensated.

Gov. Christie has proposed his 33 bill “Tool Kit” as a solution to reducing costs for towns, schools and higher education. The 2.0 percent property tax cap is the centerpiece of his package, which he claims will bring property taxes in New Jersey under control. The Tool Kit includes policy changes in the areas of “civil service, collective bargaining, employee pensions and benefits, red tape and unfunded mandates, election reform, executive superintendent authority and shared services.” All of these changes are likely to substantially change public employment in New Jersey.

But are public employees really overpaid?

In May of this year, Rutgers University held a seminar at which this question was the central issue. Professors Jeffrey Keefe from the School of Management and Labor Relations and William Rodgers from the Heldrich Center for Workforce Development presented some facts about public-private employment in New Jersey. Among their findings:

  • A basic comparison of wages indicates that private sector employees are on average paid more than public sector employees.
  • These comparisons vary markedly when education is considered. Workers with only a high school education are compensated better in the public sector than in the private sector because most public sector jobs are not paid at minimum wage and include health insurance and pension benefits.

The table below compares annual earnings at various education levels. People with bachelors’ degrees, those with professional degrees and those with master’s degrees all earn significantly more when employed by the private sector rather than the public sector. Clearly the differential between the private sector and the public sector is not due solely to wages.

Comparing Public-Private Annual Earnings

Compensation by Education Private Public

Average Wages $69,979 $56,694

Average Total Compensation $104,409 $89,917

Wages by Education

Less than high school $27,719 $41,000
High school $44,760 $44,050
Some college $53,901 $47,567
Associates $56,181 $50,916
Bachelors $89,041 $56,641
Professional degree $175,141 $79,330
Masters $107,328 $69,171
Doctorate $108,528 $109,482

  • Public employees are more educated. Forty-four percent of private sector workers have at least a college degree compared to 57 percent in the public sector.
  • Wages of less educated men in the private sector have eroded over time. Some of the possible reasons for this are the erosion of the state’s manufacturing base; the decline in private sector unions; and an increase in the supply of less educated and less skilled men.

These trends are mirrored in a report released in May 2010 by John Schmitt at the Center for Economic and Policy Research. He found that state and local employees appear to earn more than private sector employees and he attributes that to the fact that state and local employees are older and substantially more educated than private sector workers. Another interesting bit of data he cites is that 60 percent of state and local government employees are women compared to 46 percent of employees in the private sector.

Professor Keefe has done further analysis of the public-private compensation issue since the Rutgers seminar in May. Many of New Jersey’s financial problems stem from inadequate information. If it had been known that the state would lose $24 billion in revenue from the sales and income tax cuts under Gov. Whitman, would we still have done it? If it had been known how high the cost to the state of providing pensions to every public employee who earned $1,900 a year would we still have permitted it?

The Senate is considering bills included in Governor Christie’s Tool Kit starting today and the Assembly plans to review the reforms during the summer. That’s as it should be – open and public and transparent. But let’s also be transparent about the affect this legislation will have on local governments, too. For a change let’s do things right. Let’s figure out what the true future costs and the benefits of such changes will be to the services provided in New Jersey.

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Filed under Gov. Chris Christie, New Jersey Policy Perspective, private employees, public employees, tax saving tool, wages

President Obama’s Weekly Address: 4/10/10 Relief for the Middle Class at Tax Time

As April 15th approaches, the President discusses several of the tax breaks for middle class families he has signed into law. Find out more about the Making Work Pay tax credit, breaks for first-time homebuyers, rewards for making your home more energy efficient and more through our Tax Savings Tool.

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Filed under income taxes, middle-class tax cuts, President Obama, tax saving tool, weekly address