Property Tax Convention - Task Force Transcripts

1 STATE OF NEW JERSEY

3 NEW JERSEY PROPERTY :
TRANSCRIPT
4 TAX CONVENTION TASK FORCE : OF
HEARING
5 ---------------------------

6 Date: December 21, 2004

8 TRANSCRIPT ORDERED BY:

9 JACK DONNELLY, State of New Jersey, Office of
the Governor, The Statehouse, PO Box 001,
10 Trenton, New Jersey 08625

12 PANEL PARTICIPANTS:

13 (Not introduced/identified for the record)

14 SENATOR JOHN H. ADLER
MICHAEL R. COLE, VICE CHAIRMAN
15 SUSAN COLE
SHERRYL GORDON
16 SENATOR LEONARD LANCE
TERRENCE MALLOY
17 ASSEMBLYMAN KEVIN O'TOOLE
MAYOR GARY PASSANANTE
18 ERNEST C. REOCK, JR., Ph.D.
ASSEMBLYMAN JOSEPH J. ROBERTS, JR.
19 MAYOR JO-ANNE B. SCHUBERT
CY THANNIKARY
20 CARL E. VAN HORN, Ph.D., CHAIRMAN
SENATOR RICHARD VAN WAGNER
21

22 Coleen Rand, AD/T
Certified Court Transcriber
23 For Guy J. Renzi & Associates
824 West State Street
24 Trenton, New Jersey 08618
(609) 989-9199
25 www.renziassociates.com

1 (Side A)

2 MR. VAN HORN: -- the usual New Jersey

3 traffic problems prevailed, and some people had

4 difficulty getting here.

5 I just wanted to clean up a little

6 housekeeping work as we start this last and

7 fifteenth meeting of the Property Tax Convention

8 Task Force.

9 The report, which was sent to you, the

10 draft, mid-afternoon yesterday is subject to any

11 final changes today, is the bulk of the draft;

12 however, there's still opportunity to make other

13 additional editorial changes to it, up through close

14 of business on Monday. I would ask you to -- any

15 comments you have in that regard, any points that

16 you want to note of dissent, please do that by,

17 preferably, this week; but, if not, by close of

18 business Monday. That would also include if anyone

19 wants to put any material into the appendix, any

20 potentially extensive remarks that you'd like to

21 make, that would be made available, of course. But,

22 again, in order to meet our deadline and get it

23 printed, we have to get that by close of business

24 Monday.

25 I also just want to let you know that

1 the -- probably by Thursday or -- is the 31st

2 Friday?

3 UNIDENTIFIED: It is.

4 MR. VAN HORN: Okay. By Thursday or

5 Friday of next week, we will transmit the report on

6 behalf of the task force to the -- to the Governor

7 and the presiding officers of the Legislature.

8 The -- in addition, on behalf of the

9 task force, we'll certainly write formal letters of

10 thank you to a number of individuals, including

11 certainly the Legislative Services Commission,

12 President McCormick of Rutgers, and the staff and

13 others that have provided assistance to us

14 throughout this process.

15 In order to make sure that we're

16 accurate in the final report, we will circulate back

17 out, the staff will to you directly, so you can

18 review it, so this isn't the last opportunity for

19 you to look at the report. But we will need you to

20 turn around that fairly quickly because -- in other

21 words, once you -- once you make whatever comments

22 you want to make, again, we're under a short, you

23 know, tight deadline to get it -- to get it

24 finished.

25 What I want to do today is to see if

1 there are any final points by way of perfecting

2 changes that people think should be brought to the

3 attention of the full task force. I know the Vice

4 Chairman has a point he wants to raise, which I

5 thought was important. And if there are other

6 issues, we'll bring those up.

7 And then, when we conclude that, I'm

8 going to then give every member an opportunity to

9 make his or her statement about the -- about our

10 report and the next steps, and we're going to do

11 that in our -- in alphabetical order, Senator Adler,

12 so, once again, you're at the head of the class, so

13 you'll be first.

14 SENATOR ADLER: (Inaudible - not

15 recorded).

16 MR. VAN HORN: Yeah. So let me begin

17 with the Vice Chair on points that you would like to

18 raise.

19 MR. COLE: Thank you, Mr. Chairman. I

20 have one point. It appears at Pages 7 and 8 of the

21 most recent draft, at Page 7 it's under the heading

22 of "Districts":

23 "Delegates should be elected by

24 district, using the forty current legislative

25 districts."

1 And it's the last clause of the

2 paragraph, where it's talking about the one

3 person/one vote doctrine, it says, quote:

4 "-- even though that doctrine does not

5 apply to a convention since it is not a law-making

6 body."

7 Virtually the same language appears

8 again on Page 8, the last sentence of the first full

9 paragraph on Page 8.

10 "According to these constitutional

11 scholars" --

12 I'm reading.

13 "-- there is no one person/one vote" -

14 - "there are no one person/one vote issues due to

15 the fact that the convention is not a law-making

16 body."

17 This is new language.

18 In earlier drafts, including the draft

19 we discussed Friday, we were noncommittal on whether

20 the one man/one vote doctrine applied to the

21 selection of delegates. And the tact we took was

22 that we -- we satisfy any one man/one vote concerns

23 because we were using districts which were -- for

24 election, which were fairly apportioned and are

25 apportioned every ten years, to ensure compliance

1 with the doctrine.

2 And, in terms of the selection of

3 extra delegates, if the Legislature does go that

4 way, we were satisfied that we would satisfy any one

5 person/one vote concerns by having presented that

6 issue at least to the voters.

7 I don't know that, as a group, we've

8 ever taken a good, hard look on the applicability of

9 the doctrine. I'm not sure whether it applies or

10 not. But I am fairly certain that there's no need

11 for us to take a position on it.

12 So I would call for a retreat to the

13 earlier language, which simply says we're satisfying

14 any concerns, rather than take a hard and fast

15 position on whether a basic constitutional doctrine

16 applies or not.

17 MR. VAN HORN: I think without

18 objection, I think the staff should make that

19 change. Anyone object to that? Okay. Thank you.

20 Thank you, Mr. Vice Chairman. Good points.

21 Other comments that anyone makes in

22 terms -- on that dimension, you know, of the -- or

23 that level of comment, where we're talking about

24 significant changes necessary.

25 Dr. Reock.

1 DR. REOCK: One change I would suggest

2 is, in the -- about the last page of the report,

3 Appendix 4 suggests a meeting date for the

4 delegates, and we had not talked about that

5 specifically, but the suggestion here is December

6 31st, New Year's Eve, which seemed to me an unusual

7 time to call --

8 MR. VAN HORN: Dr. Reock, if I can

9 just comment on that.

10 DR. REOCK: Yeah.

11 MR. VAN HORN: If you look at the

12 appendix -- I had the same reaction. But then I

13 noticed that above it, it says "by December 31st."

14 DR. REOCK: Okay. But I think --

15 MR. VAN HORN: So, in other words, it

16 needs to be --

17 DR. REOCK: I still would suggest that

18 the --

19 MR. VAN HORN: Just say December --

20 DR. REOCK: -- 31st be -- no, that the

21 31st --

22 MR. VAN HORN: Just say December of

23 2004.

24 DR. REOCK: I would still suggest --

25 MR. VAN HORN: All right. Excuse me.

1 DR. REOCK: -- that the 31st be

2 replaced by the 17th.

3 MR. VAN HORN: Right. And it's also

4 December of -- yeah, just say December -- by

5 December 2005. How about if we did that? In other

6 words, what was --

7 DR. REOCK: Well, I would still

8 recommend putting in a specific date --

9 MR. VAN HORN: A specific date. Fine.

10 DR. REOCK: -- and I would suggest the

11 17th.

12 MR. VAN HORN: Is that going to be a

13 good day?

14 (Participants confer)

15 DR. REOCK: Well, the Board of

16 Canvassers meets early in December, I believe --

17 MR. VAN HORN: Uh-huh.

18 DR. REOCK: -- so that it should --

19 there should be plenty of time for the additional

20 twelve or ten delegates to be named by that time. I

21 -- I think the convention should be called in to

22 session as early as possible.

23 MR. VAN HORN: Yeah. Mr. Vice

24 Chairman.

25 MR. COLE: I think the report calls

1 for the -- if the delegates are to be appointed, it

2 calls for the appointments to be made ten days after

3 the Board of Canvassers certifies the results. So

4 can I suggest that we leave this as a detail for the

5 chair, to check the date of the meeting of the Board

6 of Canvassers. I think it's -- by statute, it's a

7 certain -- it's the first --

8 DR. REOCK: It's within the first week

9 of December.

10 MR. COLE: Yeah, it's the first Monday

11 or Tuesday. But I think you can easily check the

12 date and get your precise date.

13 DR. REOCK: I think we should have a

14 precise date suggested, though, because that

15 probably should be in the enabling act, as to when

16 the convention would have its first meeting.

17 MR. VAN HORN: Okay. I have no

18 problem with that. But I will -- we will work on

19 the -- getting a precise date based on when the

20 Board of Canvassers meets, unless anyone objects to

21 that.

22 Yes. Okay. Any other comments? Dr.

23 Cole?

24 DR. COLE: In regard to the scope

25 discussion on Pages 12 and 13, I want to say that I

1 very much appreciate the skill with which a number

2 of the concerns, certainly, that I raised, and

3 others I think also raised have been incorporated

4 into the text. I think it's really much improved in

5 this version, particularly in regard to how the

6 scope of the activities of convention would be

7 limited.

8 I would just like to propose the

9 addition of one word in the first sentence under

10 "Subjects for Consideration" because I think it

11 marks clearly, if we add this word, the sense of

12 what we are saying in the rest of the word. The

13 enabling act should clearly state that the

14 convention will be "strictly" limited to

15 considering.

16 MR. VAN HORN: I have no objection to

17 that. Anyone else? Okay. Thank you, Dr. Cole.

18 Mr. Thannikary, I didn't see your

19 light. Yes.

20 MR. THANNIKARY: Okay. Thank you.

21 Thank you, Mr. Chairman.

22 I just want to echo what Susan had

23 just said. Staff has done an outstanding job, and I

24 was amazed all these complex issues put together in

25 a twenty-page document.

1 Somebody asked me the other day, where

2 do we get a report. I said, it will be on the

3 website. I said, website. They're talking about

4 eighty, hundred pages report. And I want to thank

5 and express my gratitude to Eric Shuffler, Ed

6 McBride, and, of course, Jack Donnelly for the

7 outstanding job they did.

8 And my comment is the same subject,

9 "Subjects for Consideration." I know, Chairman, you

10 added the wording "especially as they affect low and

11 moderate income residents," and I was wondering

12 whether we should add a definition of what

13 "moderate" is. Moderate can be defined any which

14 way you want to, so I was wondering whether, can we

15 refine it. Just a thought, that's all.

16 MR. VAN HORN: I -- we talked about

17 that a bit, Mr. Thannikary, at the last meeting, as

18 you may recall, and I think Mayor Schubert raised

19 that same question. And I -- my feeling is that,

20 again, since we're giving a sense of direction, it's

21 best to leave that to the -- either the enabling

22 legislation, and even I would encourage the

23 Legislature not to specifically define that, but

24 leave that up to the delegates. Because I think

25 that's -- that gives a sense of where to go without

1 picking a particular income level or definition;

2 and, as they're putting proposals together, they may

3 want to be flexible on that. That was my reaction.

4 MR. THANNIKARY: Thank you.

5 MR. VAN HORN: Okay. Well, seeing no

6 other specific comments, let me begin with Senator

7 Adler, the distinguished Chairman of the Judiciary

8 Committee and one of the prime movers behind that.

9 DR. COLE: Mr. Chairman.

10 MR. VAN HORN: Oh, I'm sorry, Dr.

11 Cole. Yes. You've stolen his opportunity.

12 (Laughter)

13 MR. VAN HORN: Just be patient.

14 (Laughter)

15 DR. COLE: I love doing that.

16 MR. VAN HORN: Yeah.

17 DR. COLE: How often do you get to do

18 that to a legislator?

19 MR. VAN HORN: Only once.

20 (Laughter)

21 DR. COLE: That's probably right.

22 That's probably right.

23 (Laughter)

24 (Participants confer)

25 DR. COLE: I just wondered, at what

1 point; is it in these comments or after this, that

2 we might want to talk about areas where we might

3 dissent from a specific provision of the document.

4 MR. VAN HORN: What I've asked you to

5 do is to submit that to the staff, and it will be

6 footnoted in the final report.

7 DR. COLE: In other words, you don't

8 want to --

9 MR. VAN HORN: You can also make your

10 comment now. In other words, this is --

11 DR. COLE: So do it during this

12 commentary.

13 MR. VAN HORN: Yes.

14 DR. COLE: Okay.

15 MR. VAN HORN: This is the opportunity

16 to say whatever you want to say.

17 DR. COLE: Okay. Thank you.

18 MR. VAN HORN: But as far as the

19 official document, it would be in the document.

20 And, again, just to remind everybody, there's two

21 different ways in which you can express yourself

22 here: One is in a specific footnote to the text, if

23 you care to do that, or in any additional comments

24 that you want to put at the end of the report; and

25 then, of course, you can do it today.

1 DR. COLE: That said, I yield to

2 Senator Adler.

3 MR. VAN HORN: Thank you. Okay.

4 Thank you very much.

5 Senator Adler.

6 SENATOR ADLER: Mr. Chairman, I want

7 to start by thanking you for the way you conducted

8 these many hearings; the public hearings, and then

9 our discussions. I didn't know you before this

10 process at all, and I now am truly thrilled that you

11 were our chair. I think you and the Vice Chair did

12 a magnificent job of tending us and leading us, and

13 allowing us free reign to explore issues. And so I

14 thank you and the Vice Chair for your leadership on

15 this important mission.

16 To the members of this task force, I

17 knew some of you quite well, particularly my very

18 dear friend the Majority Leader and the Senate

19 Minority Leader; some of you not as well; some of

20 you really not at all. And I had some skepticism

21 coming into this process that we would all be

22 willing to work in the same direction generally,

23 even though we all had our individual appropriate

24 biases and backgrounds and constituencies and

25 concerns. And I was struck with the seriousness of

1 purpose of each of the members here, who were

2 diligent in their attendance, who were, I think,

3 thoughtful in their questions and comments,

4 respectful of one another, even when we disagreed

5 with one another on philosophical or smaller issues.

6 And so my thanks to the members here for having

7 really treating this with the seriousness it

8 deserved as the critical issue facing New Jersey.

9 To both the staff members and the

10 outside geniuses that come in, my great thanks for

11 all your expertise. Even on occasion, when I

12 disagreed with a couple of you -- I'm still not

13 convinced Mr. Kelly is right on the Buckley issue

14 and the twenty-five-thousand-dollar disclosure

15 question, and we'll resolve that maybe later -- but

16 the fact is the people gave us information when we

17 needed it, gave us alternative ways of looking at

18 the same question, so we could think through

19 options, and were very, very helpful.

20 And I'm also grateful that the staff

21 and the outside geniuses kept the cost down; that we

22 did a great job, and that maybe is to the credit of

23 the Chair and the Vice Chair. But we didn't exceed

24 our budget; but, to the great delight of New Jersey

25 in difficult times, actually came in way, way under

1 our budget. And that's really to the credit of this

2 mission and of what it symbolizes, which is really

3 trying to find a more affordable way to live in New

4 Jersey. So hats off to Chair and staff and outside

5 geniuses for having done such a good job keeping the

6 costs down, cognizant of what this is really about.

7 I mentioned the one process issue of

8 which I have some ongoing concern, and I'll probably

9 do a footnote on that issue.

10 With respect to scope, I have enormous

11 respect for the people in this room who, from very

12 different perspectives, were willing to recognize

13 there are some things that are very important in New

14 Jersey; that everyone, even people in affluent

15 districts, understands the importance of giving each

16 child a thorough and efficient education. And,

17 while we may quarrel politically or philosophically

18 about how we're continuing that mission of providing

19 education to children appropriately, that it was

20 always at a high level of discussion.

21 And I'm delighted that the majority

22 report, which I hope everyone or virtually everyone

23 will embrace, will recognize the exclusion of

24 certain topics, such as thorough and efficient

25 education and affordable housing from the scope of

1 the convention that we recommend to the Legislature.

2 The fact that people came in here,

3 some of us having studied this at great length, and

4 some people not having studied it at all, and having

5 everyone look at this with fresh eyes was, to me,

6 refreshing. The fact that the Assembly Majority

7 Leader, the Senate Minority Leader, and I, along

8 with Senator Schluter had spent some substantial

9 amount of time over the last several years studying

10 aspects of this big bundle of issues, and the fact

11 that new people could bring their own intelligence

12 and insight, at least to educate me on things I

13 hadn't ever considered before, having thought

14 through all these issues repeatedly over the years,

15 to me, was a real delight. And so I thank you all

16 for having reeducated me on this process.

17 And the fact that you could bring a

18 fresh look to this brings to mind, to me, the fact

19 that, while we're giving our best effort there, this

20 is not the final product. This is our

21 recommendation with some options to the Legislature.

22 And it may well be that, in the inherently political

23 process of the Legislature, that some aspects of

24 this may be changed or some of the options that

25 we've presented may be chosen, either A or B. And

1 the fact is, on some of these issues, this is not

2 the final word. But we tried very hard to give our

3 best-faith view of what the final word should be,

4 knowing that the Legislature may, for political

5 reasons or philosophical reasons or with its greater

6 wisdom -- and I don't say that sarcastically -- may

7 decide to do it differently than we've recommended

8 on some minor issues or some profoundly broad

9 philosophical issues.

10 But I'm hopeful that, having been such

11 a nonpartisan and bipartisan process for this task

12 force, that this process will continue in the

13 Legislature as much as is humanly possible on a

14 nonpartisan and bipartisan level.

15 I, frankly, don't care whether we

16 solve this problem by legislation, through the

17 Legislature in the next few months. But I think,

18 realistically, the only way we're going to do it --

19 and this task force reflects that, that reality --

20 is that we have to do it on a bipartisan basis just

21 to get it on the ballot, to let the people show

22 their wisdom to pick some delegates to do this in a

23 nonpolitical or less political way than the

24 Legislature could ever do it.

25 But I am hopeful that this process can

1 be replicated in the Legislature, on the ballot, in

2 a convention, and on the ballot again, so we can

3 really get it right.

4 This issue is of such paramount

5 importance to so many residents who are at risk now;

6 this week, this month, this year, of losing their

7 homes. And we know people who have lost their

8 homes, people in every community, people at every

9 economic level. And the fact that we took the time

10 to do this is one good step, but clearly not the

11 solution.

12 I'm hopeful that, a couple of years

13 from now, we will have ratified something very

14 positive that will be a long-term benefit for New

15 Jersey for generations to come.

16 I thank you all for letting me be part

17 of this process.

18 MR. VAN HORN: Thank you, Senator.

19 Thank you very much.

20 Dr. Cole.

21 DR. COLE: Thank you, Mr. Chair.

22 I very much have appreciated my

23 opportunity to serve on this task force. It has

24 been a very gratifying experience. I want to second

25 what Senator Adler has said; he has said it much

1 better than I could have said it, and I won't

2 attempt to repeat it all.

3 I think we have produced an extremely

4 good report. Those of the staff who have worked so

5 hard on this, I want to congratulate. I think it's

6 an excellent report on a highly complex topic. It

7 is certainly a topic of enormous importance to the

8 State of New Jersey, and I'm very gratified with the

9 result. I certainly will endorse this report.

10 And I only want to make one comment

11 now, which is my intent to dissent just from one of

12 the proposals: The proposal that the constitutional

13 convention be enabled to propose statutory changes,

14 as well as amendments to the constitution.

15 In my judgment, the creation of laws

16 rests within the authority of the Legislature and

17 the Governor, with all the checks and balances,

18 rules and procedures, and ultimate accountability to

19 the voters that the legislative process entails. In

20 my judgment, a constitutional convention should be

21 limited to constitutional amendments.

22 With that single exception, I fully

23 endorse this report. Thank you, Mr. Chair.

24 MR. VAN HORN: Thank you, Dr. Cole.

25 Ms. Gordon.

1 MS. GORDON: Yes, good morning, and

2 thank you to both chairs.

3 This experience has been extremely

4 enlightening for me. I guess in the circle that I

5 travel in, I travel normally with a list of usual

6 suspects; and, as I look at the guys gathered around

7 this table, you guys are all very unusual for me in

8 my day-to-day dealings. So that, I started out

9 extremely skeptical, but wanted to be cautiously

10 optimistic as we moved forward.

11 I knew already that, in my mind, that

12 the idea of a convention, in my opinion anyway,

13 would be totally unnecessary because I do think that

14 we have people who are in place to deliver the

15 things that we need, in terms of modifying, you

16 know, any property tax proposal. But the experience

17 and the process here has allowed for much, much

18 democracy.

19 Given the different areas and

20 backgrounds that we have, I think that it allowed

21 for tremendous input. I think that, in terms of the

22 way that the process was conducted, it allowed each

23 individual member to be an individual, and I think

24 that's important when you come together in an

25 experience like this. So I think that it was

1 extremely healthy, in terms of how we did business

2 and the final report.

3 I guess the other thing I'd like to

4 ditto is the idea of dealing with, as Dr. Cole

5 mentioned, an extremely limited scope. I've always

6 sort of had the fantasy -- some people tell me it's

7 a fantasy, but other folks say it's a tried-and-true

8 notion -- that any time you open up a process such

9 as this, it allows all sorts of folks to come out of

10 the woodwork. And you really can't predict what

11 you'll get.

12 And I think that the New Jersey

13 Constitution is too important of a document to leave

14 open for that kind of review. So that the idea of

15 having a limited, very strict scope is something

16 that I think that we should make certain is adhered

17 to, in terms of the convention.

18 And I guess the only other thing I'd

19 like to add is, as I look through it, there were

20 some items that were discussed in my absence -- and

21 certainly no one's fault but my own -- that I'd like

22 to sort of forward to you, in terms of the final

23 report.

24 Other than that, it's been a well,

25 well, highly recognized, I guess, experience for me

1 and my membership and the people who I do business

2 with, and I think it's something that I would

3 recommend for anyone in the future, who would have

4 the opportunity to serve in this capacity.

5 MR. VAN HORN: The distinguished and

6 charismatic Senate Minority Leader.

7 SENATOR LANCE: Thank you, Mr.

8 Chairman. I want to congratulate you and the Vice

9 Chairman for the way that the task force has worked,

10 and you have demonstrated fairness to all members of

11 the task force.

12 On the procedural matters that we have

13 discussed, I believe we have reached broad

14 consensus, and that consensus has been reached after

15 deliberations, based upon the concerns of all

16 members of the task force. And I support totally

17 the procedural aspects of our recommendations to the

18 Governor and the Legislature.

19 I dissent, however, and I dissent

20 vigorously from the recommendation on the scope of

21 the convention. I believe, based upon the history

22 of the state over the last generation, that it is

23 essential that spending, as well as revenue, be

24 included in the convention's mandate.

25 Any lessening of the overall property

1 tax burden, in relation to other forms of taxation,

2 will only be temporary, unless spending proposals

3 are also included in the convention's

4 recommendations to the people. In my judgment, this

5 will be property tax relief, but not fundamental

6 property tax reform.

7 Spending discussions can be limited to

8 matters related to property tax reform, and should

9 not be related to divisive social issues. I

10 modestly suggest that perhaps spending and revenue

11 issues could be based upon Article VIII of the

12 constitution itself, the taxation article. I

13 believe that we might want to discuss that further

14 in the Legislature.

15 From my perspective and the

16 perspective of the Republican members of the State

17 Senate, if we move forward to a convention, we will

18 not be doing our jobs unless both halves of the

19 ledger; the revenue half and the spending half, can

20 be included in discussions before any constitutional

21 convention.

22 The goal to be achieved in our

23 judgment, the judgment of the Senate Republicans, is

24 property tax reform, and not merely property tax

25 relief.

1 Thank you, Mr. Chairman.

2 MR. VAN HORN: Thank you, Senator.

3 Mr. Malloy.

4 MR. MALLOY: Mr. Chairman, when this

5 task force first met, it was generally stated the

6 holding of a property tax convention was, for

7 practical purposes, the last and best chance for

8 devising a more equitable method of taxing the

9 public for needed services. While the task force

10 was not assigned the difficult task of developing

11 the solutions to resolve the over-reliance on

12 property taxes, it was given the chore of developing

13 the process under which a property tax convention

14 would take place. Failure of this task force to

15 properly develop the process in a fair and equitable

16 manner would doom the concept of a property tax

17 convention to an early death.

18 I'm pleased that the end product

19 produced by this task force has an emphasis on the

20 practical and the doable. I strongly believe that

21 the drafted report represents a well thought out

22 model that the Legislature can embrace. While no

23 report will ever be perfect in the eye of all

24 beholders, the report does lay out a practical road

25 map to hold a property tax convention that will

1 allow the people of this state to devise a solution

2 to our current property tax problems.

3 I am fully supportive of the report in

4 its entirety. This report will hopefully receive

5 bipartisan support in the Legislature and the

6 process of holding a property tax convention will

7 move forward.

8 I would like to congratulate you, Mr.

9 Chairman, for your leadership that has helped to

10 allow this task force to be part of the solution to

11 high property taxes, and not dissolving to become

12 yet another roadblock to resolving the issue of

13 property tax relief that has confronted this state

14 for decades.

15 I would also like to thank the staff

16 for their assistance in helping to turn thoughts and

17 concepts into the document that's in front of us.

18 Finally, I urge the Legislature to

19 embrace this report and continue the process

20 required, so that a property tax convention can be

21 held in 2006.

22 MR. VAN HORN: Thank you, Mr. Malloy.

23 Assemblyman O'Toole.

24 ASSEMBLYMAN O'TOOLE: Thank you,

25 Chair.

1 I can only describe this last few

2 months as probably one of the most interesting

3 governmental experiences I have entertained in my

4 twenty years in government, both as a local and

5 state official.

6 And, first off, let me start by

7 thanking Minority Leader Alex DeCroce (phonetic) for

8 this unexpected appointment. I was somewhat

9 reluctant to join into this, having had my own

10 preconceived notions as to where we had to go, in

11 terms of nailing down real property tax reform.

12 But, as my colleagues have indicated, this has been

13 a political awakening of sorts and a wonderful

14 experience to share different ideas, hear from

15 experts, hear from all of us, my fellow task force

16 members. Each of us come from different walks of

17 life and presumably have different upbringing, and

18 have been influenced by our education, our

19 neighborhoods, our parents, our grandparents; and

20 all have a very unique -- and no perspective is more

21 wrong or more right than another.

22 And I want to thank my task force

23 members for being open, engaging, and Frank, and

24 having this wonderful discussion and debate.

25 I was talking with my mother last

1 night, and she said, well, how is the task force

2 going, and I said, well, it's not going exactly as I

3 anticipated, and it seems to me we needed a few more

4 people from my walk of life on this commission. And

5 she said, well, at least you are talking about

6 these, and you're part of a democracy.

7 And this reminds me -- for those that

8 don't know, I don't speak about it often, my mother,

9 who is a North Korean war refugee, reminds me how

10 wonderful our democracy is when she tells me about

11 the horrors that her family engaged in, when she had

12 to leave her country at the age of eleven with the

13 clothes on her back, and leave a very oppressive

14 regime. And my heart is awakened when we go to

15 forums like this and places in the Assembly, when we

16 can debate any issue and talk about how our

17 government works; sometimes not so well, but we can

18 at least talk about.

19 And, Chairman, you should be commended

20 for your leadership here, in allowing the open

21 process of debate, whether we agree or disagree. We

22 allowed every individual, every constituency, each

23 member who had whether special interests or just

24 their own property tax interests, have their

25 dialogue. And your leadership that allowed us to

1 meet and greet with people from Bergen County to

2 Camden and Mercer and throughout this wonderful

3 state of ours, it's been a wonderful experience in

4 just having to get to know some more people in New

5 Jersey. I want to thank the Vice Chair for his very

6 deliberative and thoughtful style, as well. And I

7 think, politically and personally, I'm only more

8 enriched because of this experience.

9 I would describe this process akin to

10 herding cats, of trying to get as many special

11 interests together, and trying to get some consensus

12 on what we think is the best reform for property

13 taxes; a difficult process, and I think we've had a

14 lot of interesting dialogue.

15 You know, in the early stages, I ran

16 into the Majority Leader Joe Roberts, a man I have

17 great respect for, who I would say has a great sense

18 of intelligence and experience. And Joe and I kind

19 of said, you know, despite our -- all of our

20 intellectual best efforts, we may just not agree on

21 certain issues that we think are the best scope or

22 the best direction for our constituents. And, Joe,

23 at the end of the day, that's probably where we are.

24 Despite our best efforts, all of our best efforts,

25 it's apparent to me that there is a great divide, in

1 terms of the scope, as to what we believe will bring

2 about serious and significant property tax reform.

3 As I understood, my charge was to come

4 here and to deliberate, and beyond word on

5 mechanics, and how, in fact, this process could

6 work. It was also specifically to help identify

7 specific issues or questions that the convention

8 should consider, and took that charge very

9 literally. And, having done that, I have brought to

10 the fore a number of issues that I thought were

11 worthy of debate, and certainly should be

12 entertained by the Assembly and the Senate.

13 And among those issues that I think --

14 and paramount is the spending issue that I think

15 Vice Chair Cole and Senate Minority Leader Leonard

16 Lance are in agreement with. I think, in order to

17 really promulgate significant property tax reform

18 and reduction, we have to talk about the spending

19 side. And, as much as some don't want to talk about

20 the school funding issue, I think that's an area

21 that the convention has to talk about.

22 I think we talk about the inequities,

23 we talk about thorough and efficient, and we've

24 heard stories, some very significant stories, about

25 the children in these Abbot districts.

1 We heard from the Vice Chair of

2 Newark, who talked about essentially the delivery of

3 education in Newark in that particular instance was,

4 neither thorough, nor efficient, and I think that

5 has to change. And I think examining the formula of

6 the Abbot school funding is a necessary issue that

7 needs to be talked about.

8 I think we need to debate and allow

9 the convention to talk about government spending

10 caps, significant spending caps at all levels that

11 allow the delivery of services, while allowing a

12 predictability, in terms of what one's property

13 taxes will be today and tomorrow.

14 And within that, I think we need to

15 talk about, whether it's the Office of -- the

16 General Accountability Office, or the Office of

17 State Auditor, we need to talk about waste and fraud

18 at all levels.

19 I think we need to look at local

20 government spending. I think we need to encourage

21 the reduction of duplicative services locally,

22 school board levels, county levels. And I think

23 it's something that we should talk about or allow to

24 have a discussion is having some of these smaller

25 towns -- and the threshold I drew was, whether it be

1 those towns with less than 5,000 members in their

2 population should at least be encouraged, or perhaps

3 even mandated, some of their municipal services, if

4 not all.

5 And I think the time is now to allow

6 the convention to talk about the role of county

7 government. There have been several legislative

8 proposals in the last few years that says that we

9 should examine the role of county government. And I

10 think that those issues warrant some debate and some

11 discussion.

12 You know, we talk about special

13 education funding. I think that's an issue that,

14 frankly, the federal leaders, whether it's our U.S.

15 Senators, our congress members, Republican,

16 Democrat, that have not ensured that our special

17 education funding has been at the forty percent that

18 is required by law. And I think we have to put some

19 mechanism in place to see that our federal

20 legislators and those in the executive department

21 fully fund special education because the special

22 education funding is really killing some of these

23 school districts, in terms of blowing their budgets

24 out of proportion.

25 I think at a certain time, sensitive

1 (sic), that they should -- that the state should

2 have to pick up -- probably even be more aggressive,

3 not only in picking up the funding from the feds,

4 but also picking up a fair share to alleviate the

5 burden at the local level.

6 You know, I also talked about

7 education tax credits. You know, we have an over-

8 crowding situation in our public schools, and we

9 know about it, we've heard about it; suburban,

10 urban. And I think that, beyond the current

11 overcrowding, we have those who choose, despite

12 paying record property taxes, are home-schooling

13 children, are putting them in private schools. And

14 I think, either to encourage that or to reward that

15 system, a state education tax credit should be in

16 place.

17 Because if the property taxes get to

18 such a high degree, some of these individuals who

19 are being home-schooled or who are being private-

20 schooled, in the alternative of putting food on the

21 table, have to say, I can't afford private school,

22 and place some of these thousands of students from

23 private to public, and further overburdening our

24 overtaxed public schools.

25 And state spending we've talked about,

1 whether it's pension reform or health benefit

2 reform, or just an internal audit performed. Those

3 things have to be looked at and debated at a

4 convention.

5 At the over -- and the end of the day,

6 I think, you know, we look at a property tax cap,

7 and I think it was Senator Lance who came up with

8 the proposal that, as opposed to this scatter-shot,

9 haphazard way of collecting property taxes and

10 assessing property taxes, I think a one percent true

11 assessed value for real estate should be a model

12 that we should aim for. So if you have a three-

13 hundred-thousand-dollar value of your home, perhaps

14 your property taxes should be capped at $3,000, so

15 there's some understanding and rational basis to the

16 property taxes.

17 I don't pretend to have all the

18 answers, I just -- and this list is by no means

19 exhaustive. I think we just have to continue

20 talking about this. We have to think in radical

21 terms, outside the box.

22 I mean, we have had -- we all have

23 nightmare stories about senior citizens and moms and

24 dads and young families that can't afford their

25 property taxes. It's never been greater. And I

1 still believe that it is the responsibility of the

2 Legislature to do their job. And I'm hoping,

3 perhaps the unintended or intended impact or fallout

4 of this discussion is the Legislature, both

5 Republicans and Democrats, get in gear and put

6 significant property tax reform on the table.

7 Because if this convention is to move ahead and go

8 forward, at the very best, in the best-case

9 scenario, property tax reform will not come about

10 until at least 2007.

11 Those are my thoughts. I have to

12 respectfully, but firmly dissent from the report,

13 from the scope of the report, despite the best

14 efforts of all of us.

15 And I want to thank you for the

16 opportunity to work with you and serve with you, and

17 I look forward to continuing our friendships, and I

18 thank you, Chair.

19 MR. VAN HORN: Thank you, Assemblyman.

20 I'm going to skip over the Vice Chair,

21 give him the penultimate word, and ask Mayor

22 Passanante to speak.

23 MAYOR PASSANANTE: Thank you, Mr.

24 Chair.

25 I'd like to just say it's been an

1 honor and a privilege to serve on this task force.

2 I believe there's no greater subject of importance

3 to the citizens of New Jersey than true property tax

4 reform. I have been involved in this process for

5 many a years, and it's been -- it's been very

6 rewarding and educational to be part of this process

7 over the last several months.

8 I'd like to thank all of the task

9 force members for their effort and their commitment

10 to this process. I believe that their attendance

11 and their vocal efforts here have really led us to

12 come up with a recommendation that is wise and

13 certainly deliberate.

14 I'd like to thank the Chair and the

15 Vice Chair because their leadership certainly has

16 allowed us to probably break a couple of rules here,

17 and get something done on time for a change, and

18 certainly come up with a report that I believe is

19 outstanding.

20 You know, good government is all about

21 leading by example, and I believe that the working

22 process that took place here over the last several

23 months to achieve a common goal is a great example

24 of good government.

25 I'd ask -- you know, I came into this

1 with some reservations concerning the Legislature,

2 and I believe that they were well founded, and that

3 the Legislature has not done their job. But I have

4 been extremely happy and impressed by those task

5 force members that represent the Legislature that

6 have sat at this table and have worked together, in

7 order to find a common goal.

8 And I'd like to recommend that all of

9 our Legislature take a chapter out of the book of

10 this process and take a look at the open debate, the

11 constructive dialogue, and the focus on what is best

12 for the citizens of New Jersey, because I believe

13 that's what happened here over the last several

14 months. And it's truly refreshing, and has re-

15 instituted my faith in the Legislature that they can

16 do a job when necessary.

17 I'd like to also recommend that this

18 same level of cooperation continue forward as we

19 present this report to the Legislature and the

20 Governor, and I urge them to fully support this --

21 these recommendations and move this forward without

22 hesitation.

23 Again, thank you all, and thank you to

24 the staff for an outstanding job in doing what we

25 have had to do here. It's been a tough couple of

1 months, and everything we've asked for we've gotten

2 immediately. It's allowed us to do our jobs much

3 better. And thank you again.

4 MR. VAN HORN: Yes. My colleague, Dr.

5 Reock.

6 DR. REOCK: Thank you, Mr. Chairman.

7 I would like to repeat a statement

8 that I made during our discussions; that is, that I

9 think the property tax problem in New Jersey is more

10 a problem of the equity or equality of distribution

11 of the tax, rather than the overall level of the

12 tax. Hopefully, we have a convention in the offing

13 that can bring more equity to the distribution of

14 property tax. While I do not agree with everything

15 that's in the report, I do agree with almost

16 everything. I think we have a reasonable package,

17 and I hope that it goes forward.

18 I'd like to commend the Chairman and

19 the Vice Chairman for the leadership on the task

20 force, and also all of the members of the task force

21 for their cooperative spirit. And I'd like to

22 commend the staff for very diligent and very

23 efficient work. Thank you, Mr. Chairman.

24 MR. VAN HORN: Thank you, Dr. Reock.

25 The Assembly Majority Leader.

1 ASSEMBLYMAN ROBERTS: Chairman, thank

2 you very much.

3 Let me begin by echoing the comments

4 of others in thanking you and the Vice Chair for the

5 -- the very good touch and the very extraordinary

6 leadership you've provided to this effort. This has

7 been a very enjoyable and immensely illuminating

8 experience, and I want to say thank you to you; to

9 the members of the staff, who have worked so very

10 hard; to our outside experts, who have been so

11 generous with their input, as well. And let me say

12 thank you to Bill Schluter for his faithfulness in

13 attending these meetings regularly, and his

14 willingness to continue sharing with us the ideas

15 that were really the genesis of this process in the

16 beginning.

17 Mr. Chairman, the report of this task

18 force is nothing short of a blueprint for revolution

19 on property taxes in New Jersey. This task force

20 was charged with recommending the most appropriate

21 way to have a fair, open, and meaningful convention,

22 and it has done so. That this task force arrived at

23 a consensus on almost all of the issues it was

24 charged with considering is a testament to you, Mr.

25 Chairman, and to the Vice Chair, and to the

1 collective work of the members of this distinguished

2 panel.

3 I am proud that the task force,

4 largely due to the direction of Chairman Van Horn,

5 did not become occupied by the question of whether

6 there should be a citizens convention on property

7 taxes. That's a question which eighty percent of

8 New Jerseyans, a broad coalition of citizens and

9 municipalities, and over three-fifths of the General

10 Assembly, last session, already answered. And the

11 answer, most assuredly, is yes.

12 When it comes to tackling a problem

13 that has plagued this state since colonial times,

14 the time has come in New Jersey for an exercise in

15 direct democracy. We can either continue to be

16 dogmatic about how, institutionally, it's the

17 Legislature's responsibility to fix the system, or

18 we can adopt a position grounded in reality and

19 geared for results.

20 Opponents of a convention should pay

21 heed to what Governor Byrne reminded this task

22 force: Never bet on a horse to do something it's

23 never done before.

24 Legislative attempts at addressing

25 property taxes have been nothing more than novocaine

1 for New Jerseyans; remedies without a lasting

2 impact. In some cases, they have been a ruse. We

3 can no longer sit back and wait for a citizens

4 revolt on property taxes.

5 Rather, our task force was charged

6 with the task of providing a design for this

7 exercise in direct democracy on property taxes. And

8 I am very proud to support our final task force

9 report, which accomplishes just that.

10 The final report of this task force

11 substantiates that a citizens convention can work,

12 that it must reduce property taxes for low and

13 moderate-income New Jerseyans, and that it must do

14 so without jeopardizing or retreating from our

15 commitment for a thorough and efficient educational

16 system.

17 The report also correctly declines to

18 endorse broad and unlimited powers on spending, an

19 issue that, without careful consideration of its

20 parameters, in my judgment, serves as a poison pill

21 to this entire convention.

22 The League of Women Voters, when they

23 visited with us, testified that the property tax

24 problem in New Jersey is now an eighteen-billion-

25 dollar problem. I've yet to hear much testimony

1 concerning exactly how much of that eighteen-

2 billion-dollar problem can be addressed by spending

3 cuts. What I have heard is testimony on how a

4 greater focus on our ability to pay taxes and our

5 uniformity clause can dramatically decrease property

6 taxes in this state.

7 Mr. Chairman, I have to confess that I

8 was initially skeptical of the idea of a task force

9 on this issue. What more could be said on the issue

10 of property taxes in New Jersey? What value could

11 yet another task force possibly have? My skepticism

12 was quickly erased because this task force zeroed in

13 on issues not previously examined in depth by the

14 Legislature, even in the legislation advocated by

15 Senator Adler and Senator Lance and myself and

16 others.

17 We dealt with the issue of the

18 November election of delegates at the time that the

19 call for the convention is issued, as a way to

20 streamline the process and move it along more

21 quickly.

22 We dealt with the issue of asking the

23 voters to consider one single question, and not

24 separate questions.

25 We focused on convention costs in a

1 manner that was very, very thorough and responsible,

2 putting to rest some of the myth that this would be

3 extraordinarily expensive, and now recognize that it

4 can be done for under $4 million.

5 We embraced Senator Schluter's

6 suggestion that the retired jurists who would serve

7 as the judges throughout this process be appointed

8 early, so that they could make sure that the process

9 operated in a very thorough and meaningful fashion.

10 Mr. Chairman, I'm also pleased that we

11 have recommended a convention process that is

12 substantially similar to the process used in 1947, a

13 convention that was one of the crowing achievements

14 of modern New Jersey history and produced a state

15 charter viewed by many as the best in the nation.

16 That was thanks to, in the words of Governor

17 Driscoll:

18 "-- devout, wise, and just delegates

19 like Wesley Lance; delegates who functioned as true

20 statesmen in every sense of the word."

21 This task force report provides a

22 convention structure that can recapture the 1947

23 experience.

24 That said, this task force also

25 recognizes that times have changed, and issues not

1 generally considered in 1947, such as campaign

2 finance realities and ensuring diversity among

3 delegates, ought to be examined and addressed, and

4 we have done that.

5 Mr. Chairman, the citizens of this

6 state look to their constitution to guarantee basic

7 individual -- individual rights and produce a well

8 ordered frame of state government. That our

9 constitution has allowed New Jersey's odious over-

10 reliance on property taxes to persist is one of its

11 few blemishes. A convention modeled after this

12 report can erase those blemishes once and for all.

13 Mr. Chairman, to those who say that

14 the report of this task force will be like so many

15 other reports, that it will be the work of well

16 intentioned people, but it will sit on a bookshelf

17 somewhere collecting dust, I'm here to tell you that

18 on January 10th, I will introduce legislation that

19 embodies these task force recommendations, this

20 blueprint for a revolution in New Jersey. And I

21 will petition Speaker Sirius (phonetic) to allow the

22 Assembly State Government Committee to begin the

23 process for considering this proposal on January

24 13th, 2004.

25 Mr. Chairman, I'm honored to join you

1 today in supporting a report that will go down in

2 New Jersey history as the foundation for fundamental

3 change of our property tax system.

4 From first-time home-buyers in Bergen

5 to senior citizens in Salem, property taxes are

6 torturing our citizens. It's time now to empower

7 our citizens to break this monster's back once and

8 for all.

9 Mr. Chairman, I'm very, very proud of

10 the leadership that you've provided, and I'm very

11 proud to be associated with the members of this

12 committee, and pleased to support this final report.

13 Thank you very much.

14 MR. VAN HORN: Thank you very much.

15 Mayor Schluter -- Schubert. Mayor

16 Schubert.

17 MAYOR SCHUBERT: Thank you, Mr.

18 Chairman.

19 I'd like to take this opportunity to

20 thank both you and the Vice Chair again, as many of

21 my colleagues have stated, for your incredible --

22 (End of Side A)

23 (Beginning of Side B)

24 MAYOR SCHUBERT: -- exercise, and I

25 think we all learned and benefitted from that.

1 I'd like to also take this time to

2 thank Ed and Jack and Eric and your terrific staff.

3 You guys did a terrific job, you're wonderful. We

4 could not have come in on time and under budget --

5 which is unusual in government -- without you guys

6 helping us.

7 I'd also like to thank the experts for

8 speaking down to my level and helping me to

9 understand some very, very complex issues. I really

10 appreciate that.

11 It was a great pleasure to serve with

12 such distinguished and dedicated people on this task

13 force. Most of you I did not know when I came in,

14 but I have certainly gained great respect for all of

15 you, and I appreciate everything that you have done

16 for New Jersey with this task force.

17 I also have some deep respect for our

18 legislators in both houses, and I believe that they

19 will do the right thing. New Jersey is a wonderful

20 place to live, with a very diverse population; and,

21 unless this issue is addressed, we stand to lose

22 both the diversity and the very things that that

23 diversity helps make New Jersey so wonderful.

24 Lean government, in many times, is a

25 process of agreement, disagreement, consensus-

1 building, and finally some sort of agreement. The

2 beauty of this process is that we have been able to

3 agree, disagree, build a consensus; and, finally,

4 although we agree on most issues, we still have the

5 ability to continue to disagree.

6 I wish the legislators good luck and

7 godspeed with their continuation of this process. I

8 have faith that you will do the right thing, one way

9 or another; whether it's moving forward on the

10 convention, or addressing the property tax crisis

11 directly.

12 As the immediate Past-President of the

13 New Jersey State League of Municipalities, I want to

14 assure all of you that the League stands ready to

15 assist you in any way possible.

16 While I also believe that spending is

17 something that should be considered, as a local

18 elected official, I know that most mayors do all

19 that they can to keep budgets in control. We, as

20 mayors, have a cap that's imposed on us. We cannot

21 just increase our budget any way we want. So I have

22 some concerns about spending being on the table at

23 the convention, but I do believe that there should

24 be a time for that to be looked at, and the time

25 really is now.

1 Again, I would like to say thank you

2 for allowing us to serve on this amazing committee.

3 I have great respect for all of my co-members. We

4 can be proud of what we have accomplished. And I

5 just hope that this is not the end.

6 Merry Christmas to all of you, happy

7 holidays, and let's hope that the new year brings us

8 lower property taxes in New Jersey.

9 MR. VAN HORN: Thank you.

10 Mr. Thannikary.

11 MR. THANNIKARY: Thank you, Mr.

12 Chairman.

13 I also want to thank you, Mr.

14 Chairman, and the Vice Chairman for your leadership

15 in guiding us through this complex process of

16 designing a constitutional convention to reform New

17 Jersey's most oppressive property tax system. You

18 have been fair and respectful of all of those who

19 appeared before this task force. You have been

20 gracious and eloquent in expressing your views. For

21 all of that, I extend my sincere thanks to you both.

22 I also want to thank the staff, Eric

23 Shuffler, Ed McBride, and Jack Donnelly, of course,

24 for their remarkable job, as I said earlier, to

25 summarizing this complex document into a twenty-page

1 report. I'm so grateful for their work, and also

2 the experts who came and testified before this task

3 force.

4 And, also, for the task force members,

5 my sincere gratitude to all of the members of the

6 task force for their contributions.

7 Professionally, I travel quite

8 extensively all over the world, mostly in developing

9 societies, and I have seen there are no freedom.

10 And I have been to Korea, there are no freedom; if

11 you open your mouth, you'd be in jail. And I was

12 awed and inspired by this process here, and this is

13 democracy in action.

14 Now I wish to share a couple of

15 personal experiences I have had during this process.

16 Here's a letter I received from a lady who lives in

17 Matawan, New Jersey; her name is Norma, Norma Jean;

18 I call her, she's my Marilyn Monroe. This is not

19 her real name; first name is Norma.

20 She is eighty years old, she's lived

21 in her house for forty years. She raised her three

22 children, sent them to school, provided for the

23 family, and always paid her taxes due. She said, I

24 don't go to shopping, to the beauty parlor, or on

25 trips. She wrote she has been working for the last

1 eight years at minimum wages to support her small

2 Social Security income and to pay for medicine and

3 her property taxes. Lately, she cannot -- couldn't

4 go to work because of illness and hospitalization,

5 and now she has a lien on her house. She lamented

6 in vain (sic) and wrote, everything is out of

7 control, to the point of being immoral, and

8 (indiscernible) she couldn't spell it, I think her

9 hands were shaking.

10 A seventy-nine-year-old man from

11 Marlboro, New Jersey told me that he simply cannot

12 afford to pay ever-increasing property taxes. Now

13 he has to make a choice, to pay for his life-saving

14 medicine or to pay for his property taxes.

15 An eighty-year-old couple from

16 Montclair, New Jersey called and said he has lived

17 in this house for forty years, and now his taxes are

18 $20,000, which he cannot afford to pay. He pleaded

19 to all of us to do something about this most-hated

20 tax.

21 To me, folks, these older Americans

22 are both our bridge to all that is precious in our

23 history, and the enduring foundation on which we

24 build our future. And, yet, they're unable to stay

25 in their homes they work their whole lives to own,

1 with dignity, and without the fear of possible

2 eviction.

3 Even our young people cannot afford to

4 live in New Jersey anymore. My friend's son moved

5 to -- moved from New Jersey to Pennsylvania because

6 he could not afford to pay his property taxes; and,

7 at the same time, support his young family. His

8 parents are devastated because they cannot see their

9 beautiful young granddaughter as often as they used

10 to. The system is tearing young families apart.

11 The young people are those who --

12 these young people are those who pledge their

13 allegiance to the flag every morning, "One nation

14 under God, indivisible, with liberty and justice for

15 all," and with an abiding faith in our system and

16 our elected officials. And, yet, the system failed

17 to provide the justice and fairness that has always

18 been promised. They have been left without a

19 choice, except to pick up and leave the state.

20 These are the stories of people who

21 have paid their dues, paid their taxes on time, and

22 played by the rules. These are amazing people.

23 These are people who are hurting; and, yet, they

24 still rise to tell their stories again and again

25 with grace and elegance if there is someone to

1 listen.

2 Governor McGreevey was right when he

3 said at the opening -- opening of this task force

4 meeting, New Jersey property tax is a tax without a

5 conscience.

6 The Governor was right when he said

7 that the system is literally tearing our communities

8 apart. And if you ask my friend, my Norma Jean, she

9 -- the lady who wrote me, she will say it has just

10 reached the point of being immoral.

11 Therefore, on behalf of my

12 organization, which is the Citizens for Property Tax

13 Reform, which is a statewide coalition, and in the

14 name of millions of senior citizens, middle class

15 and poor families who have suffered too long under

16 New Jersey's unjust and unfair property tax system,

17 I respectfully ask the Governor and our

18 distinguished legislators to accept the

19 recommendations with this task force.

20 We ask them to support the proposed

21 property tax reform convention. We ask them to give

22 us the opportunity to be citizens, not as

23 spectators, to find a solution to this problem and

24 be part of the renewal of our cities, our schools,

25 and our neighborhoods.

1 We respectfully ask our legislators to

2 set aside their political differences and introduce

3 a bipartisan bill, as Senator Adler has indicated

4 earlier, calling for a restricted property tax

5 reform convention. By supporting the proposed

6 convention, you can help to write the next chapter

7 in the remarkable story of, we the people, a story

8 that beginning with more than 200 years ago, and has

9 not ended yet.

10 As for us, the Citizens for Property

11 Tax Reform, we plan to stay active until the job is

12 done. We have already served notice to at least two

13 gubernatorial candidates that we plan to make

14 property tax reform a campaign issue at next year's

15 (indiscernible) election.

16 Mr. Chairman, we came a long way.

17 Senator Schluter, you have been my inspiration to

18 start a statewide organization. And I continue to

19 stay (sic) and look up to all of you for your

20 leadership and guidance.

21 Mr. Chairman, the people of New Jersey

22 have waited too long; over thirty years, at least,

23 to have an open discussion about this issue. Some

24 believe that the convention to discuss spending

25 issues, I understand. I understand and respect

1 their viewpoint. But we need to start at someplace.

2 I believe you came with the -- with the respectable

3 -- respectable set of recommendations. What we have

4 today may not be all that we wanted. At least we

5 have a good beginning. We must build on these

6 recommendations.

7 Therefore, I support the

8 recommendations of the task force. Now if the

9 Legislature wants to introduce a bill to cut

10 spending at all levels, my organization -- and I

11 will continue to work harder -- we will be there to

12 support them in that process -- in that process, as

13 well.

14 In supporting this -- these

15 recommendations, we, the Citizens for Property Tax

16 Reform, have a vision for New Jersey, where every

17 person has a chance to achieve the American dream to

18 buy a home, earn a decent living, provide for their

19 families; and for senior citizens on fixed income,

20 to stay in their homes, without having to choose

21 between paying for their medicine or for their --

22 for their taxes.

23 Members of the task force, I thank you

24 for your support. Thank you, Mr. Chairman.

25 MR. VAN HORN: Thank you, Mr.

1 Thannikary.

2 Senator Van Wagner.

3 SENATOR VAN WAGNER: Thank you, Mr.

4 Chairman.

5 I guess one of the benefits of going

6 last and being old is you forget what the hell you

7 were going to say.

8 (Laughter)

9 SENATOR VAN WAGNER: So I'm going to

10 be very brief.

11 You have done an excellent job, as has

12 the Vice Chairman, in leading this group. It's a

13 difficult task, and I congratulate you for that.

14 I would like to also thank the staff,

15 they did a great job, Ed and Eric and Jack. I

16 particularly want to thank Jack because he always

17 made sure I got a parking space up close.

18 I came in -- and I'd like to also say

19 to the members that serving with you has been a

20 pleasure. I've gotten an education. You allowed me

21 to bring myself up to date from the time when I last

22 served in the Legislature, and learned more than I

23 did when I -- or accumulate more knowledge than I

24 had when I came in here.

25 I'd also like to thank all the people

1 who participated in the process, both the people

2 from the government, the former governors, the

3 experts, everyone who added to this forum. I had

4 the opportunity to meet with Bill Schluter before

5 this began, and he kind of educated me a little bit

6 more about what the process was all about.

7 And, as you know, I entered the

8 process with a great deal of doubt as to the

9 efficacy of this whole recommendation, in terms of

10 its -- of its effect. But I must say, in looking

11 through the report and seeing how it was crafted and

12 put together, that I do feel it proves the

13 Legislature with some blueprint for proceeding.

14 And, as the last chairman of the old

15 Assembly Taxation Committee, which faced the

16 Robinson v. Cahill case in 1974, '75, and '76, which

17 ultimately brought about the first income tax

18 spending controls, homestead rebates, et cetera, I

19 saw -- I remain doubtful that, in fact, the magic

20 elixir that people expect from these types of

21 recommendations is going to come about. I hope it

22 will, but I doubt that it will happen.

23 One of the things that people -- that

24 this does, I believe, it will provide citizens,

25 other than ourselves, who understand how government

1 works, both from the inside and the outside, an

2 opportunity to see how some of the difficult choices

3 -- how difficult these choices are when it comes to

4 spending and raising money, and what to cut and what

5 not to cut.

6 I agree with Dr. Reock that the issue

7 of distribution is probably just as important about

8 spending and revenue-raising. And whether or not

9 these delegates will be able to struggle with that,

10 I think, will be an interesting process to watch.

11 This report has, in whole -- although

12 I disagree with some parts of it -- is a fair and

13 balanced report. And I think, if the Legislature

14 takes it up, as guaranteed by Assemblyman Roberts,

15 and approves it, and the citizens agree to convene

16 it, I think that the -- that the outcome will be

17 something that we can all look at with some -- some

18 degree of pride.

19 I hope -- and, again, I say I don't

20 think -- but I hope it will produce the kind of tax

21 relief that people think they should have in this

22 state.

23 But when one looks at the State of New

24 Jersey as a whole, and looks at how properties have

25 evaluated as an investment for most homeowners, one

1 can see one of the principal reasons why taxes -- or

2 property taxes are so high.

3 I read a recent report yesterday that,

4 in the State of Florida, which was always held out

5 as a haven for people who are trying to escape New

6 Jersey's high property taxes, that the home values

7 in Florida have increased by forty percent in one

8 year, whereas in New Jersey, they have increased by

9 fifteen percent, still a substantial increase; and

10 that, in fact, many of the people who moved down to

11 Florida to escape New Jersey's property tax burden

12 are now looking to move out because the property

13 taxes there are beginning to rise, along with the

14 values of their property. I agree with those -- so

15 this is going to be a major issue for this

16 convention to consider, how property is valued and

17 how it's assessed.

18 Although I agree with those who would

19 include spending as a consideration, I believe it sa

20 double-edged sword because it can create the kind of

21 divisiveness, in terms of some of the social issues

22 that we face today, that could spell a problem for

23 anything that comes out of this type of convention.

24 I'm satisfied that, by including -- by

25 allowing the convention members to consider

1 statutory changes, that they will have an

2 opportunity to consider spending, since the

3 appropriation -- I'm sorry, the appropriations act

4 itself isn't, in fact, a statute; and, as such,

5 those who wish to bring that into question can look

6 at it and review it and see, in terms of how the

7 budgetary process works and how spending actually

8 comes about in New Jersey.

9 All in all, I think that what's been

10 produced here by all of us in our own way is a

11 balanced and fair way of approaching a convention.

12 I think by having this convention, as much as I

13 doubt that the outcome will -- would be a favorable

14 or satisfactory one to everyone -- and I realize

15 that not everyone can be ever satisfied by what

16 comes out of anything, whether it's introduced by

17 the Legislature or by -- produced by the people

18 themselves, it will give citizens a chance to see

19 how difficult the job is that legislators have

20 today.

21 And I'd just like to close by saying

22 this. I don't really think that the Legislature has

23 failed to do their job. I think the Legislature has

24 faced the job over the course of time that has come

25 -- become more and more difficult by, in some cases,

1 their own actions, but in many cases by the demands

2 of the people of this state itself.

3 I often remember when I was Chairman

4 of the Taxation Committee, and going on the road

5 with the taxation -- the tax package that we had at

6 the time, which included an income tax. I

7 encountered a large and very hostile crowd in Bergen

8 County; and, at that time, of course, the budgets

9 were much lower than they are now.

10 And one woman raised her hand and

11 asked me what ever happened to the lottery money.

12 And I explained to her the cost of school funding

13 and the various aspects of the budget. And then I -

14 - and she said to me, yeah, well, I heard -- and I

15 suggested to her that the lottery money at that time

16 only raised about $52 million. And she looked at me

17 with a very self-satisfied smile on her face and

18 said, yeah, well, I heard it was almost a million

19 dollars a week.

20 (Laughter)

21 SENATOR VAN WAGNER: But -- which

22 gives you some idea of the educational process that

23 has to take place before this convention can be

24 convened.

25 But, all in all, let me just say that

1 -- that the job that was done here is an excellent

2 one. This is a fair and balanced recommendation. I

3 know that there will be some footnotes and comments.

5 But, again, I congratulate everyone

6 who participated. I wish you all a merry Christmas

7 and a happy holiday, and thank you for allowing me

8 to participate.

9 MR. VAN HORN: Thank you, Senator.

10 Vice Chairman Cole.

11 MR. COLE: Thank you, Mr. Chairman.

12 I want to join in my fellow

13 commissioners in, first of all, thanking you. You

14 were the right man for a very difficult job, at the

15 right time. You had the skill, perhaps your labor

16 management background helped with that, but you had

17 the skill to bring people of diverse backgrounds

18 together, even though we disagreed on a lot of

19 issues. You let the debate take hold; you didn't

20 try to push it in any particular direction, and you

21 had the confidence that these were all fair-minded

22 people and, together, would produce a consensus on

23 many issues. And I think you were right about that.

24 I'm not sure if somebody else could have

25 accomplished that, but you certainly did.

1 And the way you set up the process,

2 open debate, and people wonder whether or not there

3 are secret meetings in back rooms. There aren't.

4 People speak directly and make their point, and then

5 together a consensus either develops or it doesn't.

6 In this case, it developed on just about every

7 issue.

8 I want to thank the members of the

9 commission. You were all well prepared, great

10 intelligence, very articulate; strong in your

11 positions, but willing to listen to the other

12 person's argument, and sometimes make compromises.

13 I thought that was something that you don't always

14 see.

15 The legislative members of this

16 commission, I think, not only acquitted themselves

17 well, I think they were exemplary. You know the

18 issues, it's obvious you know the issues. You're

19 articulate. You're strong, but you can disagree

20 without being disagreeable. I found myself

21 wondering why you guys can't do this all the time,

22 you know, it's --

23 (Laughter)

24 MR. COLE: Because you obviously like

25 each other, too. That comes across.

1 The -- I join in everybody who's

2 thanked staff. I mean, Ed McBride, Eric Shuffler,

3 Jack Donnelly, others from the Governor's Office.

4 Peter Kelly, OLS, I think, thank you. And I thank

5 Al Peroni (phonetic) for making those resources

6 available. Professors Williams and Tarr; Fred

7 Herman, who joined us for at least two occasions and

8 was very well informed and very helpful. They've

9 all been very helpful, and I think it's produced a

10 good report.

11 I'm sorry to say, I'm the most

12 disagreeable among us because I do join with Dr.

13 Cole in what she characterized as the "Cole

14 amendment" on the statutes, and I won't repeat the

15 language, but I think she's captured the spirit. I

16 don't think the convention should be allowed to do

17 statutory change.

18 And, oddly, one of my reasons in my

19 own thinking was articulated by Senator Van Wagner,

20 when he said, you know, the appropriation act is,

21 after all, a statute. And think of the mischief

22 that could be had if the wrong persons got control

23 of that.

24 I also join with Senator Lance and

25 Assemblyman O'Toole, in terms of the limitation in

1 not allowing the convention to consider

2 expenditures. I believe you can solve this problem

3 on the revenue side. You can redistribute where the

4 revenue base is, but you can only solve it for a

5 moment in time. And, in order to make sure that you

6 don't have to revisit that question, as Senator Van

7 Wagner, I saw nodded knowingly, so you don't have to

8 revisit it every five years, you've got to do

9 something to control spending. I don't think you

10 have to get into individual categories, but you have

11 to put some controls in place. So, for that reason,

12 I dissent from that, as well.

13 But, by and large, I think it's a

14 remarkable document, a good product. You all should

15 be proud of yourselves. I'm proud of you; and, most

16 of all, Mr. Chairman, I'm proud of your leadership.

17 Thank you.

18 MR. VAN HORN: Thank you, Vice

19 Chairman. I don't remember having this many nice

20 things said about me since I had dinner with my

21 parents when I was a young man.

22 (Laughter)

23 MR. VAN HORN: So I appreciate -- and

24 you can see the kind of support I got from them. So

25 I appreciate all of the comments.

1 I just want to say, roughly ninety

2 days ago -- I think it was ninety-three or ninety-

3 four days ago we had our first meeting, and we met

4 pursuant to a law that the Legislature had passed,

5 asking us to study this issue and develop

6 recommendations. And I told you at that time that

7 the Vice Chairman and I were dedicated to meeting

8 the deadline. Well, we have.

9 More importantly, much more

10 importantly, I said we were dedicated to an open,

11 thoughtful, deliberative process that would inform

12 the public about the nature of constitutional

13 revisions and the difficult issues that were

14 necessary, in order to come to judgment; and also to

15 provide you, the members of this task force, with

16 the expertise and information you needed to have, in

17 order to make informed decisions.

18 As Assembly Majority Leader Roberts

19 said, and we all know, we're not the last voice in

20 this process. But I think that we have worked

21 through some very difficult issues. I think we have

22 done so in a professional, civil, and open manner,

23 which, as many of you have said, should provide an

24 important model for the way decisions should be made

25 and can be made in a democracy.

1 We've helped frame the choices for the

2 Legislature, the Governor, and the public. We've

3 made twenty-six recommendations on timing, scope,

4 method of election, and the conduct of the

5 convention, that provide very helpful guideposts to

6 the Legislature and the Governor.

7 And we've amassed a substantial public

8 record of the hearings, the expert testimony, the

9 public statements, upon which the legislators can

10 draw, as they make their next round of

11 deliberations.

12 I'm honored that I was chosen for this

13 important task, and to have the opportunity to work

14 with all of you. I have gotten to know all of you

15 and appreciate each of your individual points of

16 view, your unique expertise, your wisdom, your

17 patience, and your willingness to enter into this

18 debate and come to every single meeting at Rutgers,

19 scheduled at my convenience. But, hopefully, you

20 found this a commodious place for us to do business.

21 I especially want to acknowledge the

22 Vice Chairman and reciprocate the very nice things

23 he said about me. It has been a real pleasure to

24 work with Michael. He's a distinguished attorney, a

25 wonderful gentleman, and a person I'm happy to now

1 call a friend.

2 I also want to acknowledge the

3 outstanding staff work that we received. You may

4 have recalled at the first meeting Professor

5 Williams and I argued over which one of us was

6 responsible for Ed McBride's excellent professional

7 preparation. Now you see why we were entering into

8 that argument. Ed has been a student, a friend, a

9 colleague, and now I'm very pleased to have worked

10 with him on this.

11 Eric Shuffler is certainly also --

12 needs to be given credit for shepherding this whole

13 process through now two governors, and having had

14 the wisdom to assist us, but also stay out of the

15 way. And sometimes that's hard for governor's staff

16 to do; having been one, I know that.

17 Jack Donnelly is also -- was a great

18 find. Although Jack looks like he's still a

19 teenager, he's actually been in government for

20 twenty years, and you can tell it. He's a complete

21 professional; and, in all manner of his work, he has

22 been of great assistance to us.

23 The Legislative Services Commission,

24 especially Peter Kelly and his colleagues, have been

25 extremely valuable to us. If you recall, we called

1 upon Mr. Peroni to provide that assistance; they did

2 so graciously and substantially to help us because

3 they, of course, have been involved from the very

4 beginning, and I think their participation in this

5 process will help our legislators carry it forward

6 at the next step.

7 My colleagues Professor Williams and

8 Tarr also were terrifically helpful, both in

9 preparing us and commenting along the way. I'm

10 sorry Bob isn't here, but, Alan, you'll convey my

11 appreciation to him, as well. One of the wisdoms of

12 Rutgers was to establish a Constitutional Law Center

13 at Camden, and now we have the benefit of drawing

14 upon their advice for this task.

15 I do also want to acknowledge my staff

16 at the Heldrake Center (phonetic), who provided many

17 of the amenities and support for us, and obviously

18 the staff of Rutgers University.

19 I said at the beginning of this

20 process to a newspaper reporter that I was not sure

21 that a constitutional convention was the best way to

22 proceed. And for -- I wasn't, I guess, terribly

23 surprised that I received some criticism for having

24 an open mind on this subject. But I did, in fact,

25 start with an open mind on nearly every subject

1 before this task force, except that we needed to

2 address fundamental reform and lessen the burden of

3 property taxes and establish a fair system. But how

4 we went about that, on every subject I had an open

5 mind.

6 So I learned from all of you and from

7 our experts and from the public about, not only the

8 importance of this issue, which I think I already

9 understood, but how we might use this particular and

10 extraordinary process to make progress in the State

11 of New Jersey in addressing this issue.

12 I now believe that this process of

13 constitutional revision, along the lines that we

14 have recommended, or one similar to it, offer an

15 important opportunity for fundamental reform; not

16 fundamental reform that will last forever because

17 nothing does, but fundamental reform that will, in

18 fact, move us further towards a fair system that

19 lessens the burden on this most unfair tax.

20 And now, of course, it's up to the

21 Legislature to take the next step. I'm certainly

22 pleased to hear Assemblyman Roberts make his firm

23 commitment to do so, I would expect nothing less of

24 him, given his commitment to the subject over the

25 years.

1 And I sincerely hope, as I'm sure all

2 of us do, that both Republicans and Democrats to

3 find a way to continue to bridge whatever

4 differences may exist, in order for them to move

5 forward and address this issue through the

6 convention process, and then to call upon the voters

7 of the state to render their final judgment in the

8 sovereign will of the people.

9 I thank all of you for your support

10 and patience with me in leading this effort as best

11 I could.

12 And the last business that we have

13 before us is to sign a document, which Mr. Donnelly

14 has prepared, indicating our conveyance of this

15 report to the Governor and to the presiding

16 officers. And, Jack, if you'll send that around.

17 Let me just close by wishing you all

18 happy holidays, and thank you all.

19 (Proceedings concluded)

1 C E R T I F I C A T I O N

3 I, Coleen Rand, do hereby certify that

4 the foregoing transcript of proceedings by the New

5 Jersey Property Tax Relief Task Force, recorded on

6 audiotape on December 21, 2004, is a true and

7 accurate non-compressed transcript of the

8 proceedings to the best of my knowledge and ability.

12 Coleen Rand AD/T 419 Date

13 For Guy J. Renzi & Associates