Tax Cap Reaction Mixed

Reactions to Gov. Chris Christie's proposed property tax cap of two percent and "toolkit" range from support to opposition to uncertainty among leaders in town.

Mayor Andy Skibitsky is supporting the proposals put forward by his fellow Republican. Board of Education President Julia Walker noted that the plans negotiated over the weekend contain uncertainty for the school system until a final package passes the legislature this summer. Mike Sawicki, the president of the Firefighters Mutual Benevolent Association, expressed opposition to the Christie plan, which he said would hurt his membership.

The Christie plan, agreed to by the governor and legislative leaders over the weekend, includes a two percent property tax cap for local governments, with exemptions for health care costs, pension costs, capital projects and debt service payments. Spikes in school enrollment and emergency situations are also exempted under the new cap, which will replace a four percent cap implemented by former Gov. Jon Corzine. Christie's plan also includes the 33 bill toolkit of measures ranging from arbitration reform to increased state control of teacher contracts and school budgets.

Skibitsky said he believes the two percent cap is a help to reduce property taxes and would be helped by the passage of the toolkit items.

"It's a good start," Skibitsky said. "New Jersey taxpayers are suffering from high taxes. The toolkit is the important part. Those 33 items getting passed with help towns reign in the costs."

Skibitsky indicated that the arbitration reform proposals in the toolkit rank as the most important to him. As a part of the toolkit, Christie is proposing changes to the binding arbitration process utilized in negotiations between local governments and public employees unions. The governor's proposals include limiting any new contract to no more than the cap and requiring arbitrators to consider the impact of new contract costs on property taxes before making the awards.

Skibitsky noted that the current binding arbitration rules have hindered local governments by giving the arbitrators the ability to set contracts at rates higher than the rate of inflation. He said he hopes the governor's plan will be deliver lower raises.

Skibitksy said he is also looking to see the pension reform aspects of the toolkit pass, which include changes to the amount of sick and vacation time carried over by public employees, along with changes to who can participate in the pension system. Skibitsky declined to comment on if these changes would have a change in Westfield awarding pensions to part time municipal attorneys, an issue long opposed by Democratic leaders in town. The mayor said he has not read the pension reform bills and would need to know more details of the plans before commenting on how Westfield would address the issue.

Walker, who also serves as the board's finance committee chairwoman, said she is not certain on the impact the plan will have on the school system. She noted the changing nature of the plan in the last week, including changes from the governor's initial two and a half percent cap to a 2.9-percent cap proposed by Senate Democrats.

"It is clearly a moving target," she said. "It has moved from a constitutional amendment to legislative action. From 2.5 to 2.9 to 2.o and the list of exemptions has changed as much as the percentage itself. At this juncture it is hard to comment on what the bills to be voted on are."

Walker noted she is pleased that the final plans show a sensitivity to the rising costs of health care plans for public employees, including the exemption built in to the two percent cap. The school board president has long noted the impact of rising health care costs on school budgets.

Earlier this year, the school system's new contract with the Westfield Education Association included increased employee health care givebacks in exchange for a 3.9-percent annual raise. These givebacks are in addition to the 1.5-percent giveback Christie and legislators implemented in March.

Walker said it is hard to know the exact impact the cap will have on school budgets going forward, due to the fact the toolkit legislation is still pending in Trenton. She said she and her BOE colleagues are continuing to monitor state legislative activity with an eye to how the board will be treating the budget going forward.

"At this point it is hard to know," she said.

On the union side of the aisle, Sawicki said he and the FMBA are opposed to the toolkit, which has garnered opposition from public employee unions statewide. He said that he believes that while property tax reform is needed in the state, he does not think the cap and toolkit will benefit taxpayers.

He said going forward, he is concerned the cap will hamstring town officials on spending issues and hurt them with the ability to negotiate a fair contract with public employee unions. Sawicki said he would prefer a final package that includes more for public safety.

In terms of the toolkit legislation, Sawicki said the arbitration bills concern him, since he does not see the issue impacting Westfield. He noted that the firefighters contract has a no strike clause and his union and town officials were able to negotiate a plan that includes increased health care givebacks and a one year salary freeze. Sawicki believes the new legislation proposed by Christie is one sided against the unions.

"The main misconception is that these people feel is there a need for some type of reform but the laws are one sided," he said.

Sawicki would prefer the legislature, which is to begin considering the package  on Thursday, to include more exemptions to the cap than are in the package, along with more tools that will help the unions and town in future negotiations. He said he thinks the package will harm property values by reducing local government services.

"People move into towns like Westfield because of the services and its a good town," he said.