State lawmakers concerned over the state’s chaotic financial environment tossed around an interesting idea in March, in following the lead of many other states in allowing municipalities to begin levying local taxes.
The idea seemed to have originated in the Assembly Budget Committee, where Chair Louis Greenwald, D-Camden, first broached the subject, although it seems to have fallen to the wayside as the budget debate has moved on.
Local governments in New Jersey get the vast majority of their revenue from property taxes, and Mr. Greenwald thinks the way other states have used these local taxes to offset the property tax burden on many taxpayers could be utilized effectively in New Jersey.
“It is not (an increase) if it is offset by stabilizing property taxes,” said Mr. Greenwald, in March, to the Associated Press.
Places like Trenton could certainly benefit from instituting a local tax, because of the presence of a large population of state workers that come in and out of the city each weekday.
This population does contribute to Trenton’s economy, but certainly not in the way that many envisioned when the state greatly expanded its operations here in the middle of the last century.
What’s worse is that those massive state structures littered around downtown and the rest of the city don’t contribute property taxes, instead paying their way through an oft-criticized payment-in-lieu-of-taxes. Even recently, City Council members were calling for a renegotiation of that deal, but pigs will probably fly over the statehouse before that happens.
To offset that perceived shortfall, Trenton and other cities with large populations of commuter workers could throw their weight behind getting legislation passed that would allow the local taxes that Mr. Greenwald spoke of.
A city income tax coupled with a rebate program for city residents could neatly contribute to city coffers without hurting the people who actually live here, who could get most or all of their city tax back in the form of a rebate, or an exemption.
Support of local taxes could also open the way for Trenton – a so-called “green” city – to begin taxing people who own gas-guzzling SUVs, or engage in other environmentally damaging activities.
With all of the alleged political clout of Trenton Mayor Douglas H. Palmer, it would interesting to see what would come of a push towards empowering Trenton and other towns to impose local taxes on certain people or activities, which could in turn help address this year’s loss of state aid dollars and New Jersey’s larger problem of crushing property taxes.