Home Rule

Discussing property taxes, it’s always important to recall that high taxes are a symptom, not the disease. Spending is the problem and the only way to control taxes is to cut – and limit – spending: local, county, and state.

That having been said, a majority in a particular community might wish to spend more than their counterparts in another town. The solution is to accommodate both: let localities set their priorities and give them the power to effect them, without "state" assistance or mandates.

The goal of property tax "reform" measures should NOT be to ensure property tax cuts, but, rather, to ensure that the people of each municipality can write their own destiny.

Put another way, if (say) Newark imposes high property taxes, that’s a matter of the utmost unconcern to folks in (say) East Orange. Newark should impose the tax burden its Governing Body deems appropriate to fund the sort of government it believes necessary, and that its residents can afford. Elections exist to correct mistakes local officials make in gauging the desires of their constituents.

The purpose of a true property tax reform program should be to ensure that the people, through local elections, can truly decide for themselves how, and how much, to tax, and how much to spend.

Instead of condemning "home rule", we should strengthen it, albeit, perhaps, with a somewhat different definition of "home", through voluntary mergers, about which more later. Municipalities should attend to municipal concerns, like education. The counties – if we decide to continue their existence – to county concerns. And the State to its own bailiwick. There should be no mixture -- aid from the state to localities. Each entity should be on its own, with its own resources, its own sources of revenue, and its own responsibilities.

Of course, this requires some tolerance of inequality; some "rich" municipalities will be able to afford more governmental services with lower taxes than their "poor" counterparts. But it should offend noone that Madison can afford to spend more than can Irvington, anymore than it offends us that New Jersey can afford to spend more than Mississippi, or the US more than Mexico. Or that some parents can lavish goodies upon their kids, while the rest of us can’t. Such is the nature of life, and of lines on a map.

The ideal solution to the property tax crises would be a three step process. First, effect as many voluntary municipal mergers as possible, subsidizing the process sufficiently to help assure passage of most of the referenda. (Result: instead of 39 Morris County municipalities, end up with between 8 and ten) Consolidate all local power in one Governing Body, abolishing all other local sources of power, and eliminate virtually all state mandates respecting tenure, pay, pensions, benefits, and the like.

Second, divide governmental responsibility among local, county (if retained), and state; absolutely forbid pork or subsidies. Abolish the state income tax, permitting municipalities to replace it with a locally enacted levy. Alternatively, if one desires to retain some redistributionist elements, adopt a flat rate income tax, using the proceeds to fund equal vouchers to every child in the state.

Third, provide for sustainability, by limiting the political influence of groups which benefit from high taxes, and by evicting the Courts from taxing/spending decisions.

The ultimate effect of such a system would be to ensure political responsibility – the same folks who benefit from the spending pay the taxes which sustain it, ending existing incentives for profligacy. Too, it permits municipalities to tailor their taxation and spending to meet local needs and reflect local reality. A local option income tax, for instance, permits municipalities to choose the mix of taxes which best suits their individual needs, while ensuring that they cannot foist the consequences of irresponsible spending onto the backs of neighbors, who lack a voice – and a vote – in local politics.

Put simply, no political entity should be permitted to spend money unless its own constituents pay the underlying taxes.

Over time, different community patterns would develop. Some municipalities would spend more, some less. Some would impose relatively higher property taxes, others relatively higher income taxes. Dissatisfied residents could vote with their feet as well as with their ballots, except, now, they could find another municipality in New Jersey which meets their needs, rather than fleeing to Pennsylvania.

For those who complain that "poor" municipalities would suffer, such would certainly not be the case with a voucher program; every child would be treated equally. But, just as importantly, "poor" municipalities are not doomed to stay that way, any more than a poor person need spend his life in poverty. See, for instance, Hoboken.

Intelligent municipal government – one which keeps order, keeps taxes low, encourages community spirit (as, for instance, by encouraging volunteering services rather than using expensive, paid employees) – can turn a "poor" municipality around.

Certainly, spending cuts will inevitably affect many people adversely, primarily governmental employees. They might make less, will work more, and will certainly receive less attractive benefits. And they will be precluded from (direct) political action to secure a better deal. But the choice is simple; someone must sacrifice if taxes are to be cut. Given that the vast bulk of governmental spending goes to salaries and benefits, the only way to reduce taxes is to cut employee costs.

Ultimately, that obligation will fall on local officials. As it should. Freed from expensive state mandates, and provided with the means to effect their responsibilities, local government will do that which it does best: meet local needs. And the electorate of each municipality will hold their local officials accountable for the choices they make.