Governor Offers Tax Reduction Plan

"It is the needs of the property taxpayers that has to drive our decisions," Corzine told legislators. "Our state's future is at stake. Let's make history together. We must attack the '800-pound gorillas' and the 'sacred cows.'" The latter were references to everything from home rule and the inefficiencies of more than 1,400 taxing entities in a state of just 7,500 sq. mi., to government employee benefits that critics say are too generous.

"Enough is enough-let us join together and agree that before the end of the calendar year, we must have a comprehensive property tax reform that truly addresses this crisis," he said.

The eight-point plan Corzine proposed calls for the reform of state aid formulas to towns and school districts. He termed the existing formulas, "outdated, ineffective and outright unfair." He also offered up a plan to use $350 million in new sales tax revenues to fund homestead rebates and direct tax credits. Those new sales tax revenues are anticipated from the recent increase in the state sales tax from 6% to 7%. Corzine also proposed to use another $250 million a year from those increased sales tax revenues to provide financial incentives for towns, counties and school districts to combine services.

The governor also proposed a reform of public employees' benefits. Under his plan, benefits for current employees would largely remain in place, but the retirement age would be increased for new hires and alternate health plans would be instituted for those new employees. Also on his agenda is a reduction is state debt—he promised to unveil, within the next 90 days, a plan that could involve the sale of state-owned assets, possibly including privatization of the state-owned toll roads, the New Jersey Turnpike and the Garden State Parkway.

Corzine also called for a modernization of the state and local tax codes, including giving towns the right to charge new fees for certain local services to cut the reliance on property taxes. He also proposed a cap on annual property tax increases of 4%—the statewide average increase has been 6.5% a year for the past several years, and higher in many communities.

Finally, Corzine proposed the establishment of the post of state comptroller. The appointed position would carry a six-year term and would provide an independent monitor of the state's financial activities.