New Jersey's Senate says yes to a tax-cap compromise

TRENTON - The state Senate on Thursday approved legislation that would install a 2 percent limit on property-tax increases, the centerpiece of Gov. Christie's plan to rein in the highest such taxes in the country.

The cap, which would go into effect next year, heads to the Assembly, where it is scheduled for a vote Monday.

The measure is a compromise between Christie's quest for a constitutional amendment holding annual increases to 2.5 percent and the counterproposal by Senate President Stephen Sweeney (D., Gloucester) of a statutory 2.9 percent cap.

Christie's version would have made debt service the only cause for an exemption; Sweeney's would have allowed many more waivers.

The approved legislation would allow exemptions for pension and health-care costs; costs associated with emergencies, to be defined by regulations; and capital expenditures, including debt service.

A majority of voters would have to agree in a referendum to override the cap. Towns that did not spend up to the cap one year could bank the savings for future years.

The Senate approved Christie's conditional veto of the Sweeney bill, 35-3, changing the legislation to match the compromise between the two leaders announced Saturday.

The accord ended several tense days of negotiations in which Christie ordered special sessions of the Legislature beginning July 1 to consider his proposal. Democratic legislative leaders declined to call their members in over the Fourth of July weekend.

"I think today what we've proved to the state of New Jersey is that Democrats are serious about reducing property taxes," Sweeney said. He said Christie's willingness to make the cap statutory was key because "if there's been mistakes made, as we go forward we can fix them."

Assembly Speaker Sheila Oliver (D., Essex), who was not a part of the negotiations, has said she will not stand in the bill's way.

The Senate voted after about 45 minutes of speeches. Republicans hailed the bill as a vital step toward controlling property taxes, while Democrats said that, though not perfect, it was a move in the right direction.

New Jersey residents "will finally have predictability and control," said Senate Minority Leader Tom Kean Jr. (R., Union).

The bill is a "very significant, historic initiative" that will be noticed across the nation, predicted Sen. Joseph Kyrillos (R., Monmouth).

Sen. Bob Smith (D., Middlesex), one of three Democrats who voted against the measure, said it should have included a transition from the current 4 percent cap. Dropping directly to 2 percent would be "worse than trying to quit smoking cold turkey," he said.

More than 600 police officers and thousands of teachers and support staff were laid off this year because of budget cuts, Smith said. With the cap, he said, residents could expect more cuts in years to come.