Assembly OK's Diversion of Tax Revenue

Assembly OK's Diversion of Tax Revenue

The state Assembly passed a measure (ACR-20) Monday that would ask New Jersey voters in November to approve the permanent diversion of all of last year’s 1-cent sales-tax increase tax to property tax rebates or credits. The resolution now moves to the Senate for consideration. NJSBA opposes the move.

Last year, voters approved the permanent use of half of the new sales tax revenue for property tax relief. The other half of the new revenue was placed in the state budget and enabled the first meaningful increase in education funding in five years.

Aid = Tax Relief Edwina M. Lee, NJSBA executive director, said that continuing to place the remaining sales tax funds in the state budget would balance property tax relief with proper funding for education. She also stressed that property tax relief is a by-product of adequate state aid to education.

Lee cited a January report by Rutgers-Newark, which found that, if New Jersey had fully funded its state aid formulas over the past five years, property taxpayers would have experienced significant relief. In 2005-2006 alone, school property taxes statewide could have been reduced by up to $846 million, according to the study.

Senate Schedule Senate approval of ACR-20, or its counterpart, SCR-137, would place a question on the November ballot to amend the state constitution to earmark the full amount of last year’s 1-cent sales tax increase for property tax relief. The Senate could consider the measure at any of its four remaining sessions this month.

The Senate would have until August to give final approval to the ballot question. However, since it is unlikely that the Legislature would return to Trenton during its summer recess, any action is expected to occur this month.

The measure is supported by the Senate President and the Assembly Speaker. Gov. Jon S. Corzine opposes the plan. However, a legislative resolution to place a proposed constitutional amendment on the November ballot does not require the governor’s signature.