The gift that keeps on taking
As state legislators continue to bang their heads against the wall in an effort to fix the State of New Jersey's long festering fiscal problems, Gov. Jon Corzine has suggested another manner in which municipalities might boost revenues without jacking up property taxes even further: local sales taxes. While beleaguered local governments might welcome the addition of a new weapon to their tax levying arsenal, most would be well-served to politely refuse this present from Trenton, including Teaneck.To be sure, Teaneck must find a way to alleviate the homeowner tax burden. However, imposing a sales tax is not the answer. One can easily imagine the consequences of an additional percentage point or two tax on the shops of Cedar Lane or Teaneck Road, and they ain't pretty. Do we really want to give shoppers further encouragement to spend their money in Paramus? The short term revenue gain from a sales tax would be wiped out by the long term damage to Teaneck's business districts.
Instead of looking for ways to shift the weight of a crushing tax burden, we should look for ways to actually lighten the load. That means reducing spending. Gov. Corzine should be using his influence to hammer away at home rule and to hold the line on pay and benefits for public employees. And Teaneck's Township Council and Board of Education should assume that no help from Trenton will be forthcoming and that belts need to be tightened now.
posted by Teaneck Blog @ 10:48 AM
4 Comments:
The Board of Ed has seen no increase in aid from Trenton for 5 years, which has acrually translated into a negative funding issue when factored into the mandatory 3% cap on annual increases... I don't think the schools are under any illusions of a quick fix. Too bad, however, that Corzine and legislators don't have the guts to eliminate the paltry Homestead Rebate and instead funnel that money to offset tax increases in municipalities. That would probably be too easy to consider!
Few municipalities would be harmed more by this proposal than would Teaneck.
Under the current system, sales tax monies basically flow back to the state, who then allocates them for the benefit of all state residents, regardless of where the money is collected. Paramus, which has half of its rateables in commercial property, sees a huge benefit from property taxes, but gets no direct benefit from the spending that takes place in the Borough. In this manner, a Teaneck shopper who buys an item at Garden State Plaza is not directly passing any money to Paramus, and can have a vague hope that some of the Sales Tax collected will flow back to Teaneck.
Under the Governor's proposal, those shopping meccas with the least to lose by raising rates would be able to put their hand right in the register (and the shopper's pockets) by adding to the sales tax rate. It's not hard to imagine that an add-on of as little as half or even a quarter of one percent could bring in many millions to a Paramus.
Teaneck, with shopping districts on Cedar Lane and elsewhere that are already struggling, can ill afford to impose yet another disincentive to shopping here in town, even if it might bring in some added revenues to the Township's coffers.
Teaneck can only see a net loss from the implementation of this proposal. I'm still waiting to hear for a local option on Bergen County's Blue Laws for Teaneck, which might actually benefit our communtity, its residents and those of the surrounding area, with far less harm than a regressive increase in sales taxes on top of the already burdensome 1% add-on imposed in our new state budget.
Under the Governor's proposal, those shopping meccas with the least to lose by raising rates would be able to put their hand right in the register (and the shopper's pockets) by adding to the sales tax rate. It's not hard to imagine that an add-on of as little as half or even a quarter of one percent could bring in many millions to a Paramus.
A 0.5% local sales tax could bring Paramus more than $25mm in revenue per annum if the statistics cited here are correct.
Corzine also said he was "desperate" to complete revisions of the school-funding formula soon. He said one goal of the new formula would be distributing state aid according to the location of poor students instead of a rigid list of needy districts.
The above quote from the cited article may be of more interest than a possible sales tax. Whether or not it is advantageous to Teaneck it seems a better approach to distributing state aid.
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