Published reports indicate that Governor Chris Christie is set to propose constitution amendments creating a "hard" 2.5% cap on property taxes to replace the current 4% swiss cheese cap. The tax could only be increased by local voter referendum.
He would also cap state spending increases at 2.5%.
I applaud the goal, but wonder if a constitution amendment is the way to do it.
Can Christie get a super majority of the Democratic legislature to go approve such an amendment?
What about inflation? Many economists expect that when our economy rebounds from the current recession that our next crisis will be Carter era type inflation or worse given all the money that Washington is spending. Inflation of 12.5% would be mean property tax and state spending reductions of 10% in "real dollars." Given the recent rise in property taxes, that would not be so bad. However, making the cap constitutional would make it very difficult to tinker with should doing so be genuinely appropriate.
The other problem I have with a constitutional amendment to achieve property tax caps it that such an amendment further institutionalizes the current property tax structure, keeping schools being funded by local property taxes.
Chrisite has said he will put an end to unfunded state mandates.
Public school spending is the ultimate unfunded mandate. Under current law, a community with per pupil education costs that obscenely exceed the state average can not make the very rational economic decision to stop funding an inefficient school system and give the money to parents to send their children to private schools or another school district.
New Jersey will have the highest property taxes in the nation for as long as the state mandates that local property taxes fund public school and as long as the state mandates the curriculum and programs of the schools.
Christie is fulfilling his promise to turn Trenton upside down. I hope he turns it upside down, then grabs it by the ankles and shakes.
Creating a new education funding formula that does not rely on property taxes would truly be transformative. If we are going to tinker with the constitution, let's do that.