Legislature Unveils Property Tax Reform
Gov. Corzine Encouraged, but Seeks Bolder Reforms
By Robert J. Tartaglia
The New Jersey Legislature’s Democratic leaders delivered some 100 recommendations on property tax reform on Nov. 15. However, Gov. John Corzine believes they can go farther by mandating a 20 percent property tax cut, consolidation of services and other long-term reforms. The governor also believes we need a state comptroller to watch state spending.
“Reform is popular. Reform and sustainability are hard, very hard,” Corzine told hundreds of state and local leaders at the League of Municipalities’ convention in Atlantic City. “If some people aren’t screaming at the end of this process, then I guess I’ll know the reforms are not bold enough.”
Those words could be construed as a signal that Corzine will be in for his second battle of the year, following his impressive budget work this past summer. The entire Legislature is up for reelection next year and could create serious issues if the reforms the governor is seeking are met with fierce union opposition.
Legislators certainly worked hard this summer, with more than 40 hearings in 100 days, taking testimony from more than 400 individuals on such topics as school funding reform, consolidation of shared services and changing public worker benefits. One other problematic consideration was a change to the Uniformity Clause of the constitution, which would have taxed businesses similar to residents. The business community registered strong opposition and that measure was scrapped.
NJBankers will be watching closely and reporting as the property tax debate continues.
DOBI WORKING GROUP UPDATE
NJBankers, the League of Community Bankers and the Department of Banking and Insurance working group has been meeting regularly to develop a better process that is more acceptable of the state-chartered banking community.
As you may recall from my last article, the new Dedicated Funding Act became law on July 1. Before its enactment, NJBankers, the New Jersey League of Community Bankers and other interested parties participated in forums about the impact of the new process on the state-chartered institutions examination fee structure. We were assured that it would benefit the banking industry and would create a less costly environment.
One serious point of contention is how the new asset-based formula will be spread across all state-chartered institutions. Before the new law became effective, a number of such institutions with significant assets collapsed their charters, creating a significant hole that other state-chartered banks had to fill. Many member banks saw significant increases in their exam fees due to the changes.
While there have been meetings to create some relief initially, it may take some time before banks see a decrease in their fees. The positive side of the issue is significant de novo activity in the state, along with DOBI’s potential of luring some federal-chartered institutions.
In a state where all businesses experience higher costs to operate, we hope our hard work will pay off and bring some relief to our state-chartered institutions.
ACTION IN TRENTON
Much of the legislative attention is focused on property tax reform, but lawmakers continue to focus on issues such as financial privacy. Legislation under consideration in this area could prevent financial institutions from marketing their products to potential customers. NJBankers is concerned that enactment of stricter “opt-in” provisions – as required under the bill, S-547, which prohibits sharing of customer data unless the customer gives explicit permission – would deny customers access to certain financial products and be costly, burdensome and unnecessary. S-547 (Buono) has passed the Senate Commerce Committee and is expected to pass the full Senate by the end of the year. The proponents continue to focus on identity theft as the sole reason for passing the bill, even though the Legislature addressed that issue last year and passed comprehensive reform that was a model for the nation to follow.
Sens. Raymond Lesniak and Barbara Buono assisted in crafting some very helpful amendments. We are hopeful that we will be able to further modify the bill to reduce its cost to our member banks.
A-1205 (Deignan/Egan) is legislation requiring a home lender under the “New Jersey Home Ownership Security Act of 2002” to provide a borrower with the mortgage payoff balance within five business days after the request is made. It was released from the Assembly Financial Institutions and Insurance Committee on Nov. 9. The bill now moves to the full Assembly for consideration.
NJBankers had originally opposed the bill last session but was able to have the sponsor agree to move the time limit to five days. Also, NJBankers believes the request should be in writing, which we are hopeful the sponsor will consider.
S-1643/A-3668 (Cardinale/Gill-Cohen/Cruz-Perez/Manzo) is legislation prohibiting the denial of credit on the basis that the individual was a victim of identity theft. It was released from the Assembly Consumer Affair Committee on Nov. 9.
The bill now moves to the full Assembly for a floor vote. The Senate companion passed the upper house in June. NJBankers supported the bill once it was agreed that the person would provide a copy of the police report to the financial institution. That language is in the bill.
Other bills still pending that we continue to monitor are the ATM 911 mandate, which NJBankers strongly opposes, and Sen. Stephen Sweeney’s health insurance mandate (S-477), about which we continue to hear rumors that the Legislature may try to employ a “Massachusetts” approach. Massachusetts included a state funding assistance provision in the law; that would seem to be less onerous than the current legislation. Stay tuned!
ACTION BANKER COUNCIL UPDATE
NJBankers Action Banker Council recently met with Bill Castner, executive director of the Assembly Democratic Office. We discussed the importance of a healthy, stable and strong banking community to the economic growth of our state. Castner has been a consistent supporter of the banking industry. He, as you may recall, was appointed by former Chief Justice Deborah Poritz to the IOLTA Working Group. That collective effort provided a significant savings to banks in New Jersey and was a model for the nation to follow.
Our next ABC meeting will be with Assemblyman Neil Cohen, chairman of the Assembly Financial Institutions and Insurance Committee.
Robert J. Tartaglia is acting president and director of government relations for NJBankers. He can be reached by e-mail at email@example.com