Gubernatorial Candidates Release Plans for Tax Reform

A sure-fire way a candidate for governor can get voters’ attention? Pitch a plan to reform taxes. Democratic candidate Jim Johnson and Republican Jack Ciattarelli have already done so. And now Lt. Gov. Kim Guadagno’s released a plan to reduce property taxes. NJTV News Chief Political Correspondent Michael Aron spoke with Anchor Mary Alice Williams about the highlights.

Aron: Mary Alice, Guadagno put out a plan that she says would provide immediate property tax relief. It would cap the school portion of your property tax bill at 5 percent of your income. If you exceed that, you’d get a tax credit from the state. She says the average would be $1,000 per family with a maximum of $3,000. And since that would create a deficit for the school district, the state will make that up and pay the school district directly for the difference.

Williams: What do you make of that plan?

Aron: It reminds me of Christie Whitman in 1993 who very late in the general election, her campaign put out a dramatic 30 percent income tax cut plan. This is pretty dramatic. Of course it’s coming seven months before a general election and before she’s even won the primary. But it’s significant. The big problem with it is that it costs $1.5 billion of state money, which the state doesn’t have. Guadagno says the money would come, $250 million from an audit of state government, $500 million from the overfunded school districts like Hoboken and Jersey City and $1 billion in natural revenue growth. One catch is that if you currently get a Homestead Rebate, you can’t get both the Homestead Rebate or the Senior Freeze and this plan. You have to pick which one you want. Bottom line: if you make $100,000 and the school portion of your property tax bill is greater than $5,000, you’d get capped at five.

Williams: What about Ciattarelli’s plan?

Aron: It’s ironic that Ciattarelli had an op-ed in the Star-Ledger today saying that Kim Guadagno has no plan. Of course that was written before she released her plan today. But we talked to him a little while ago. He’s very skeptical that natural revenue growth can provide all the money that she says it can provide. His approach is to emphasize consolidation and regionalization of school districts. Evening out school aid between the so-called overfunded and underfunded districts. He says places like Jersey City and Hoboken are overfunded. And that no town would pay less than 25 percent of its school costs. So a town like Newark which usually pays 10 percent of its school costs would be hurt under this Ciattarelli plan. But he would make the thing more equitable.

Williams: Let’s go to the Democrats. Do they have a property tax reform plan?

Aron: All of them approach property taxes in different ways. Phil Murphy promises more state aid to school districts and increasing rebates. John Wisniewski would fully fund the schools and drift away from the property tax toward the income tax as a way of funding schools. Ray Lesniak would double Homestead Rebates and create a comptroller for education to control costs in school districts. And Jim Johnson stresses comprehensive ethics reform to root out wasteful patronage and seeking more federal aid.

Williams: How important is taxes — the whole issue — to voters?

Aron: I’ve been doing this job for 35 years and it’s always been at the top of the list.