TRENTON, N.J. -- New Jersey's Gov. James E. McGreevey has told the state's mayors that the solution to pressure to increase property taxes is less spending at the local level, not more aid from the state. The state recently released figures showing that property taxes, already the nation's highest, rose more than 6 percent last year.
"This is more than a simple revenue problem," McGreevey said to recent the annual gathering of mayors. "Spending continues to rise, and local government and school property taxes continue to increase at rates that are unacceptable."
Noting that New Jersey also has the nation's highest per-pupil education costs, he proposed limits on spending for administration of local districts, with sanctions for those that exceed them. He acknowledged, however, that the plan would require legislative approval.
'The big issue'
"That's not going to happen," Sen. Leonard Lance, the state Senate Republican leader, said after the governor's remarks.
Lance added: "The big issue is the big increase in property taxes, and the governor has not addressed that in two years."
The average property tax bill increased by 6.3 percent in 2003. The previous year it rose 6.6 percent, according to the state's Department of Community Affairs.
The department also reported that last year, the average residential property value went up by 6.9 percent.
McGreevey, who was the mayor of Woodbridge Township until he took office in 2002, surprised and upset his former colleagues when he told them about three months ago that New Jersey had too many local governments and that it had wasteful, duplicative spending.
In his State of the State address, the governor called for consolidation of many municipal services and the dissolution of the smallest school districts, some of which have no schools but send pupils to neighboring districts.
Local officials continue to attribute their rising costs to the freeze in state aid, and several mayors have pleaded for help, saying that their taxpayers have been left to shoulder huge increases in school enrollment.
Frank Belluscio, a spokesman for the New Jersey School Boards Association, said New Jersey schools have been close to the national average in the percentage of school spending going to administrative costs.
"New Jersey schools are not top-heavy," Belluscio said. While enrollments and teaching staffs have grown, he said, "we've had virtually no increase in administrative staff over the last 10 years."
Belluscio also said that dissolving the tiny, non-operating districts would not save much, since they usually have no administrators, only a part-time bookkeeper who handles tuition and transportation bills.
Similarly, William G. Dressel Jr., the director of the New Jersey State League of Municipalities, questioned whether towns would save much by consolidating and sharing services as McGreevey has repeatedly urged.
"All of this in and of itself isn't going to produce the broad-based property-tax relief we've been working for 2 1/2 decades," Dressel said.
But an analysis by the state treasurer's office last year found that "only a fraction" of the increases in local governments' costs were attributable to the freeze on local aid.
In his remarks, McGreevey also blamed "rampant overdevelopment" for rising property taxes and repeated his call for legislation to levy fees on developers.
"Every time you build a home with two children, that family isn't covering the cost of education," he said. "The developer says, 'Thank you, God bless, adios,' and he's out of there."
After the governor's remarks, Susan Bass Levin, the commissioner of community affairs, said that local governments could realize savings, but that the property-tax problem could not be resolved by itself. "Somebody said the state should pay more," Levin said. "Well, the state is us."
"Here's one taxpayer pocket for property taxes and here's the other taxpayer pocket for income taxes, and there's one over here for sales taxes," Levin said. "That's the essence of the debate. That's where we need to come to grips with the question."