2006 NJ Election: Public Questions

Besides the Menendez / Kean race which is stealing all the headlines, there are also three public questions on the ballot. Generally to appropriate funding through constitutionally dedicated taxes. Property taxes, Corporation Business Tax Revenue for an Open Space preservation fund, and a re-structuring of the fuel tax to give additional funding to the state transportation system.

Below is an overview and more background for each public question, provided by the Leauge of Women Voters. They’ve also listed a handy Pro/Con list to further help you decide what you should vote.

Public Question # 1: Dedicates annual revenue of an amount equal to a tax rate of 0.5% under the state sales tax for property tax reform

Do you approve the amendment of Article VIII, Section I of the Constitution of the State of New Jersey, to provide for the annual dedication and annual appropriation of an amount equal to the annual revenue derived from a tax rate of 0.5% imposed under the New Jersey Sales and Use Tax, exclusively for the purpose of property tax reform, through a special Property Tax Reform Account established in the constitutionally dedicated Property Tax Relief Fund?

Interpretive Statement (on ballot):
This constitutional amendment provides that an amount equal to the annual revenue derived from a tax rate of 0.5% imposed under the New Jersey Sales and Use Tax Act shall be annually dedicated in a special account in the Property Tax Relief Fund and annually
appropriated for property tax reform.

Background: The sales tax went from 6 cents to 7 cents in July of 2006. The question dedicates a half cent of the new one cent sales tax increase to Property Tax Reform. It does not change the current 7% sales tax rate. The revenue would be dedicated every year unless removed by another ballot question even if other tax reforms are put into place. Projections for the tax dedication are between $500-600 million per year at this time. A no vote will leave the monies available for appropriation by the
legislature.

Reasons to vote YES on the ballot:

  • Property taxes are very high relative to other taxes in New Jersey and this is a step toward relieving that over-reliance.
  • Dedication of a portion of the new tax revenue prevents it from being used for general spending by the state.

Reasons to vote NO on the ballot:

  • Constitutionally dedicated taxes reduce the flexibility of the state to direct revenues to changing priorities.
  • It is unclear what exactly these funds would be used for as no underlying legislation has been written and the term property tax reform can imply many things.

Public Question # 2: Constitutional amendment to expand uses of dedicated tax revenues to fund improvements and facilities on preserved open space lands

Shall the amendment to Article VIII, Section II, paragraph 6 of the Constitution of the State of New Jersey, expanding the authorized uses of the constitutionally dedicated Corporation Business Tax Revenue, to allow the use of 15% of the dedicated funds to fund the development of lands for recreation and conservation purposes, and beginning on January 1, 2016, allow the use of an additional 17% of the dedicated funds to fund the development of lands for recreation and conservation purposes, be approved?

Interpretive Statement (on ballot):
Since 1996, 4% of the annual revenue from the Corporation Business Tax has been constitutionally dedicated to fund environmental programs. Approval of this constitutional amendment would (1) expand the authorized uses of those revenues to fund improvements and facilities for recreation and conservation purposes on preserved open space lands, and to pay debt that may be incurred from the issuance of bonds for those purposes, and (2) change the allocation of funds for the existing authorized uses. The Constitution currently allocates 33% for hazardous discharge cleanup performed by the State, 17% for grants for air pollution control programs until 2016, a minimum of one-sixth (or 16.66%) or a minimum of $5 million for water quality projects, and a minimum of one-third for funding loans or grants for underground storage tank programs and loans or grants for hazardous discharge remediation programs, and for an underground storage tank inspection program. This constitutional amendment would authorize 15% of the dedicated funds to be used to finance improvements and facilities for recreation and conservation purposes on preserved open space lands and an additional 17% for that purpose in 2016 by reducing the allocation of monies for water quality programs, State funded hazardous discharge cleanup, and the underground storage tank program, but would require an appropriation to the underground storage tank program if less than $20 million is available in any year for that program.

Background: The original dedication in 1996 has been amended two times, once in 2003 and again in 2005. These amendments expanded the uses of this dedication but for very specific purposes and shifted funding around between designated programs. Currently, the dedicated funds provide for four environmental programs, cleanup of contaminated sites, upgrades and closures of underground storage tanks, water quality projects and air pollution control grants to retrofit publicly owned diesel vehicles. The current projection is that some of the programs will not require the dedicated funding allocated for them in the future so a new use of the funds, improvements and development of open space lands, is being introduced to use the dedication. Beginning in 2016 the air pollution grants expire and those monies will be added to the new open space program, also.

Reasons to vote YES on the ballot:

  • The state parks are overdue for repairs.
  • The revenue already dedicated to the other programs would remain collected but unused if not reallocated for another use and not needed in the dedicated program.


Reasons to vote NO on the ballot:

  • Revenue for state park repairs could be appropriated in the budget on an annual basis as needed. Constitutionally dedicating taxes reduces flexibility in spending.
  • It is difficult for voters in 2006 to project the needs of the state in 2016.
  • Once constitutionally dedicated funds are no longer needed for their original purpose, the funds should be returned to the general treasury to meet current budgetary needs.

Public Question # 3: Constitutional amendment changes the dedication of motor fuels tax to state transportation system

Do you approve the proposed amendment to the State Constitution, agreed to by the Legislature, which changes the current $0.09 per gallon dedication of the motor fuels tax to $0.105 per gallon to be used only for the funding of the State transportation system, subject to previously enacted laws dedicating any of these revenues for debt service on bonds of the State or for any other uses of these revenues?

Interpretive Statement (on ballot):
This amendment to the State Constitution dedicates 10.5 cents per gallon of the existing motor fuels tax for the cost of funding the State transportation system. The current constitutional dedication is 9 cents per gallon of the motor fuels tax. The existing motor fuels tax is 10.5 cents per gallon for gasoline and 13.5 cents per gallon for diesel fuel. This amendment does not change the motor fuels tax rates.

Background: The Transportation Trust Fund is projected to run out of funding in the near future and will not be able to support its debt load or fund repairs, improvements, and other transportation needs. Funding can be provided annually in the state budget but to sustain a long range plan for a state transportation system a predictable funding level can also be beneficial. This ballot question would dedicate an additional $78 million to the current $468 million dedication. This amendment does not change the motor fuels tax rates. Rather, it dedicates an additional portion of the existing motor fuels tax to funding the state transportation system. A no vote leaves the dedication at the existing 9 cents per gallon.

Reasons to vote YES on the ballot:

  • The state transportation system would be supported by the increase in the dedication as the Transportation Trust Fund will be servicing debt in the future if not provided more funding. Many road and transportation projects are not being accomplished due to a lack of state funding.
  • Using a “gas tax” to fund a state’s transportation system makes economic sense in that the rate of usage that causes the need for improvements and maintenance is taxed proportionately.
  • No new taxes are being raised to fund this initiative.

Reasons to vote NO on the ballot:

  • Constitutionally dedicated taxes reduce the flexibility of the state to direct revenues to changing priorities.
  • Funding for the transportation system could be appropriated in the budget on an annual basis as needed.

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Prepared by the League of Women Voters of New Jersey

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3 Comments on "2006 NJ Election: Public Questions"


a_siren
Member
9 years 10 months ago

Vote Yes!
This was part of the deal struck by Corzine this summer. The SALES (not INCOME) tax was increased by a penny, and half of that increase was to go towards property tax relief. That was the the only reason the sales tax increase passed.

Also note that the ballot question on the gas tax does not increase the gas tax; it only allocates all of the gas tax receipts to road and transportation projects.

videoordvd
Member
9 years 10 months ago

Thank you so much for posting this! I was having trouble wrapping my head around questions 2 and 3 and no one I knew could make much more sense of them, let alone give some pros and cons for each.

I agree with Cracker that using the income tax increase to lower property taxes seems like unfair shuffling of the tax burden. And as for #2, I don’t think the state should be allocating money for 2016 we have such trouble getting a balanced budget each year.

But I may vote yes for #3, simply because the roads around here are in such deplorable condition.

Cracker
Member
9 years 10 months ago

Vote NO!
To all public questions, especially #1!
They want us to subsidies their property taxes!
FFFFF Them!!!
Property taxes aren’t high enough!

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