NJ property tax rebates are Trenton gimmicks. Why you shouldn't expect them to last: Stile
When Gov. Phil Murphy unveiled the latest New Jersey property tax rebate in Fair Lawn last week, he saluted his "dear friend,'' the late Gov. Brendan T. Byrne, who created the forefather of the grand gimmick more than 40 years ago.
But Murphy's rollout last week — and showcasing of it in his budget address Tuesday — more closely mirrors Gov. Christie Whitman in April 1998, who narrowly escaped an embarrassing election loss months before.
During her campaign, Whitman gave lip service to property taxes and pledged to tackle other affordability issues like high auto insurance premiums while her rival, upstart Democrat Jim McGreevey, pounced on those themes with robotic intensity.
So she responded with the NJ SAVER rebate, a generous — in 1990s dollars — giveaway to demonstrate that, in the Clintonian parlance of the time, she felt taxpayers' pain. Whitman introduced the plan with great fanfare in Ridgewood — less than 4 miles from the site of Murphy's rollout in Fair Lawn.
Murphy's $900 million ANCHOR plan — Affordable New Jersey Communities for Homeowners and Renters — follows a similar track. He, too, eked out a narrow win after being repeatedly depicted by Republican Jack Ciattarelli as politically tone-deaf on taxes. Now, he was back, flush with cash and recasting the same old Trenton gimmick.
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Property tax rebates: What we've learned
But there are some things that we have learned about rebates along the way since the Homestead rebate helped Byrne seal his improbable comeback in his 1977 reelection race, or after Whitman introduced the SAVER rebate in Ridgewood before leaving for a tumultuous gig with the George W. Bush administration.
They don't work.
At best, rebates provide a temporary sugar rush of relief, but they don't halt the steady, inexorable rise of property taxes. Nothing can stop them. They get larger, year after year, like the "The Blob," the amoeba-like alien of the 1958 sci-fi horror film that devours everything in its path.
And another thing: Despite all of Murphy's calls to make the ANCHOR rebates a permanent feature, rebate programs never last. As soon as there is a downturn in the economy and money is needed to plug a gaping budget shortfall, lawmakers and governors will collaborate to dismantle or curtail the benefit, leaving homeowners disgusted.
Take former Gov. Chris Christie, who stared down a budget gap in 2011. He cut the popular Homestead rebate, a replacement for Whitman's SAVER plan, from $1 billion to $268 million. He limited eligibility to homeowners and tenants making $75,000 or less, and instead of being mailed out in checks, the rebate took new form as a quarterly tax credit.
The average benefit declined from $1,035 in fiscal year 2010 to $269 in fiscal year 2011, according to the Office of Legislative Services.
"Our new ANCHOR Property Tax Relief program is a game-changer,'' Murphy said Tuesday with a dash of Trumpian, salesman-y bombast.
History proves otherwise.
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Still, nothing to scoff at
That's not to say the average $700 for homeowners and $250 for renters is something to scoff at. It's enough money to cover a property tax bill for a month, and it will help renters as landlords begin recouping losses from the pandemic.
And it's also true that local spending is the major driver of local property taxes. New Jersey towns have come to expect a local police force with generous salaries and enough equipment to arm a state militia.
Local residents tolerate expensive "pay-to-play" law firms ringing up billings with little oversight at their local town halls. They want their high school football teams playing in state-of-the-art equipment on astroturf practice fields.
Try cutting back on twice-a-week curbside trash pickups. New Jersey suburbanites would take to their town halls with pitchforks.
Trenton, for the most part, subsidizes -- and enables -- local government spending.
"The thing we here in Trenton can do is take some of the sting out of those tax bills,'' Murphy said of Trenton's property tax investment, including beefed-up funding for school aid, now at a record $9.9 billion. And Murphy noted that the rate of property tax increases was lower in his four years than under his predecessor.
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Still, the rebate is a lot of money that might be better spent on other long-term infrastructure, health care and educational needs.
Murphy's fiscal year 2023 budget, for example, calls for a paltry $25 million in upgrades for the Cold War-era unemployment insurance computer systems and commits $8 million in federal funds for new "camera work stations" and to update "signature pads" at consumer-facing Motor Vehicle Commission offices across the state.
That's it? After the pandemic exposed the chronic inefficiency of both systems, we're treated to new cameras and wrist pads? We need colossal investments and instead we get door prizes.
It would be a tough sell for Murphy to have said, "We're going to redo both antiquated systems. We are going to bite the bullet. No more lines. No more stalled checks for hungry, anxious families." But why not give it a shot? What does a lame-duck have to lose? Be a disrupter and do something radical -- fix things.
But he took the easy rebate route. No mess. No fuss.
The embrace of the ANCHOR plan — which Murphy pledges will grow to $1.4 billion in three fiscal years — is not so much a game changer as a turning point for Murphy, as it was for Byrne and Whitman.
Murphy came into Trenton vowing innovation, like the creation of a new state bank. Now, he's just following the same old, play-it-safe Trenton playbook. He played by the Trenton rules to get reelected, cutting deals and currying support from party bosses. And now he went for the easy money.
Without apparent irony, Murphy said this on Tuesday:
"This is one of the few times when going back is how we move forward."
Charlie Stile is a veteran political columnist. For unlimited access to his unique insights into New Jersey’s political power structure and his powerful watchdog work, please subscribe or activate your digital account today.
This article originally appeared on NorthJersey.com: NJ property tax rebates are Trenton gimmicks. They never last