New Jerseyans Explore How Many Ways You Can Disguise a Tax Hike

Look for the property tax issue to dominate New Jersey's race for governor this year. The state's gubernatorial battles will be closely-watched around the country not just because it's an off-year with few other races -- but because a big win by Senator Jon Corzine, the likely Democratic finalist, would considerably raise his presidential profile.

Look for the property tax issue to dominate New Jersey's race for governor this year. The state's gubernatorial battles will be closely-watched around the country not just because it's an off-year with few other races -- but because a big win by Senator Jon Corzine, the likely Democratic finalist, would considerably raise his presidential profile.

The Garden State's per capita local property tax burden -- most of which funds school districts -- is the highest in the nation. The state's historic response has been to offer "relief" in the form of rebates that today resemble the mail-in variety you find at Staples to get back $2 from your purchase of $50 ink.

Enter "The Plan 4 NJ," a coalition that includes the Education Law Center and the state teacher's labor union. Give them extra credit for creating a plan. Unfortunately the plan stinks.

It rebates property tax that exceeds 6% of income for earners making up to $200,000. Make more and you get zilch. Plus, the cap has a cap: You can't get more than a $2,000 payout unless you're a senior citizen. Rebates would reduce overall tax revenue, which the group proposes to make up with progressive marginal tax hikes on "upper-income New Jerseyans." In a state that last year established a "millionaire's tax" on incomes above $500,000, upper income starts at $70,001 and ends at $500,000 (there's only so much this stone will bleed).

Like other rebate schemes, The Plan 4 NJ doesn't address the root cause of high property taxes. The goal here is to shift control of the purse strings from school districts to the state, giving outfits like the teacher's union and Education Law Center a single place to flex their muscle and reduce the risk of tax revolts at the district level. But it's a measure of the brewing tax rebellion in New Jersey that the big-spending constituency must go to such lengths to disguise a tax hike as "tax relief" for homeowners.

Mr. Corzine clearly recognizes that the property-tax issue could be make or break for him, and the teacher's union is a key Democratic ally. So far, however, he's adopted a classic procedural straddle -- he won't advocate a specific proposal but declares that, as soon as he's elected governor, he'll call for a special session of the state legislature to "relieve the heavy burden of property tax."

-- Christian Knoebel