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ISELIN, NJ-New Jersey’s state constitution will probably be changed, said Assemblyman John Burzichelli (D-Gloucester). Eliminating the uniformity clause requires such a constitutional change, and currently keeps businesses and residential homes taxed similarly.

Changing the uniformity clause would allow more of the tax burden to be put on commercial property owners and their tenants. It requires a change to the state constitution, which has not been done since 1947.

Burzichelli discussed the state government plans at a NJ-NAIOP meeting this week, titled New Jersey’s Economic Growth Challenges. Burzichelli is aware of the CRE industry’s opposition to the change, but there are only so many ways to balance the budget.”It’s hard to get government to stop spending,” Burzichelli says. “Everybody thinks the waste is somewhere else.”

Burzichelli is on the Tax Convention committee, one of four committees for property tax reform. The other three are on pensions, school funding and consolidation. Burzichelli said changes in all four areas will be the most likely solution. He was critical of government officials whose only solution to failing schools is to spend more money on them. “At some point spending money stops being effective.”

The four committees need to show their work product by Nov. 15, and Burzichelli said they are on schedule for it. If action is not taken by Jan 1., Gov. Jon Corzine has called for a citizen’s constitutional convention to solve the problem. “The goal is to not have to go to a citizen’s convention,” Burzichelli said. “I’m optimistic we can get there.”

New Jersey is 49 of out 50 for its tax rank, said Dr. James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy, Rutgers University. Only New York was worse. For private sector job growth, New Jersey is an anemic 43 out of 50. New Jersey still has 13% of the country’s pharmaceutical jobs, but that was over 20% just 16 years ago.

The past decade has not been strong for New Jersey. From a high point of 2000 (when New Jersey had single digit office vacancies) through 2005, the state lost 118,000 high-paying private sector jobs, reported Hughes. During this same time period, the state gained 113,000 service sector jobs.

It took 32 years for half the manufacturing jobs in New Jersey to be lost, Hughes said. Telecom job losses were much faster, only taking nine years to shed half its 50,000-member work force. The wireless communications industry is hiring, but New Jersey is only gaining one wireless job for every eight lost telecom jobs.

Mitchell Hersh, president and CEO, Mack-Cali Realty Corp., moderated the event. He told attendees that the commercial real estate industry pays 22% of New Jersey’s property tax currently, putting $2 billion into the school system annually. He considers the Millionaire’s Tax to be one of the worst bills the state has passed, and referenced a CEO of a Parsippany company he knew that was now a Florida resident because of it. “Ultimately, the business will follow.”

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