NJ Legislators Mulling Plan to Subsidize Property Taxes

TRENTON, N.J. (AP) -- Legislators are studying how to make the state pay as much as half a homeowner's property tax bill under a plan receiving increased attention as lawmakers try to cut New Jersey's notoriously high property taxes.

Assemblyman John Burzichelli, the chairman of a special committee considering whether the state constitution needs to be amended to bring property tax relief, cautioned Monday that nothing's been decided and figures remain conceptual. However, he said lawmakers are mulling having the state pay from 20 to 50 percent of the property taxes on primary homes.

Burzichelli said legislators who have until Nov. 15 to devise property tax reform recommendations are trying to finalize how much the plan might cost and where the money to pay for it might be found.

But he said the plan would bring immediate and dramatic relief for taxpayers paying the nation's highest property taxes.

"For us to say this special session is a success, we have to bring an impactful result here," said Burzichelli, D-Gloucester. "The idea is to get the place of principal residency out of the crosshairs."

The average New Jersey homeowner pays about $6,000 per year in property taxes, twice the national average.

The tax has risen about 7 percent annually in recent years and has consistently been cited in polls as the leading concern among state residents.

Under the plan:
    - Annual property tax rebate checks mailed to homeowners would be converted into direct property tax payments by the state, an idea introduced in July by Gov. Jon S. Corzine.
    - Voters would be asked to amend the state constitution to guarantee the annual payments.
    - Only primary homes would be eligible, meaning businesses and shore homes, for instance, wouldn't be involved.
    - The program would probably come with a limitation. For instance, those earning more than $200,000 a year could be ineligible or only the first $500,000 in property value would be considered.
    - The program would likely be phased in.
    - The state could pay for the relief with either spending cuts, savings from public worker pension reforms and government consolidations or by increasing the state income tax or expanding the sales tax to other items and services.

"It's very much a work in progress,'' Burzichelli said.

Assembly Speaker Joseph Roberts Jr. confirmed the idea is "absolutely on the right track" and is among "a number of worthy ideas that are on the table."

"It's an approach with merit and one that may well advance," said Roberts, D-Camden. "There's a great sentiment that focusing the property tax relief on New Jersey's primary residences might be the best way to proceed."

Senate President Richard J. Codey said he shared the idea's goal of immediate relief, but questioned how much the state could afford. The Essex Democrat said lawmakers are looking to go "as high as we can possibly go."

Burzichelli said at the least the state would pay 30 percent of property taxes on a senior citizen's primary home and 20 percent on everyone else's.

He said doing so would cost an estimated $2.7 billion; having the state pay 50 percent of the property taxes on everyone's home would cost an estimated $5.4 billion.

"This stuff is very conceptual," Burzichelli cautioned.

Corzine has proposed taking the $1.1 billion spent on rebates this fiscal year and increasing it to $1.6 billion with money earned from this year's sales tax increase. Corzine spokesman Brendan Gilfillan noted Corzine initially proposed turning the rebates into direct payments but said cutting property taxes will require other reforms.

"And that is what we must focus on," Gilfillan said.

The rebates have fluctuated annually. This year's checks were about $300 for most homeowners, down from $800 two years ago.

Burzichelli said constitutionally guaranteeing the payments would force the governor and lawmakers to provide consistent relief.

"It's always been subject to the whim of the Legislature," Burzichelli said. "This would impose discipline on us."

Legislators have contemplated immediately helping homeowners by limiting property taxes to a percentage of household income or restricting how much property value is taxed.

But those ideas would involve amending the state constitution to allow homes and businesses to be taxed and assessed differently, a move opposed by businesses and Corzine.

(TM & � 2006 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO & EYE Logo TM & � 2006 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)