TRENTON, N.J. (AP) — In a handful of New Jersey towns, residents who already bear the burden of paying the nation's highest property taxes are starting to see new and increased fees on everything from recreation programs to ambulance service.
Local officials argue it's their only means of coping with the rising cost of government and meeting state mandates under a sweeping 2010 law that imposes a 2-percent cap on property tax increases.
But the emerging practice has riled both Republican Gov. Chris Christie, who made reining in property taxes a signature issue of his 2009 gubernatorial campaign, and Democratic state Senate President Steve Sweeney. They contend it violates the intent of the law, which allows municipalities to exceed the cap only with voter approval, and they have promised to close what they say is a loophole.
"Municipal governments must do more to control property taxes," Sweeney said. "Paying lip service to their residents' needs for cost containment, then turning around and hitting them with a separate bill, is just taking more money out of the same pocket."
Christie spokesman Michael Drewniak said that while not many towns have tried to go around the cap yet, the governor wants to put a stop to it.
"Our intention is to prevent this from becoming a slippery slope," he said.
New Jersey has the nation's highest property taxes, averaging $7,758 per household. More than 40 states have some kind of property tax limit, the first of which was imposed in Florida in 1855.
Sweeney is sponsoring legislation aimed at stopping municipalities from using new or higher fees to circumvent the property-tax cap. The Senate passed the measure and sent it to the Assembly on May 31.
Bill Dressel, executive director of the New Jersey League of Municipalities, said the cap is too strict, and he noted plummeting real estate values and state aid to local governments has made the situation even tougher. State aid to municipalities has fallen from nearly $2 billion to less than $1.5 billion over the last several years.
Unlike local governments in many other states, those in New Jersey can't enact local sales taxes, personal property taxes, amusement taxes or other taxes. That leaves property taxes and a limited hotel/motel tax to support a wide range of services.
At the same time, Dressel said, towns are facing increasing state mandates for things such as environmental permitting and employee training.
Officials in Lawrence Township, just outside Trenton, have raised some fees and are looking at increasing others after voters in April voted against exceeding the state tax cap.
Lawrence officials have since eliminated 13 positions, including five police officer positions, as part of a $44 million budget. They have bumped up fees for recreation programs, now $40, and have raised fees for ambulance service, which now costs $750, plus $11 per mile, just to name a few.
Even with those cuts and fee increases, township manager Richard Krawczun said they're facing a $1.3 million budget deficit next year. The average property tax bill in Lawrence was $6,922 in 2009, of which $1,355 went to the township.
"I think residents are not pleased at the fact that they are going to now have service cuts, but it is not possible to stay within the cap without making the adjustments," Krawczun said.
Charles Connell, a former mayor and township committee member who's lived in Lawrence for 88 years, said voters don't understand the property tax issue. He noted fewer than 4,000 people in the town of more than 33,000 voted on the referendum.
"You can always get people to vote against something, especially if it costs $1 ... or something," Connell said.
But Max Ramos, another Lawrence resident, said the cap is the only way to get local officials to address rising costs and taxes.
Ramos said residents felt extorted when officials warned of service cuts and fee increases if they didn't approve the referendum to raise property taxes, and said he's not willing to give up services or accept fee hikes.
"I just view it as inefficiency," Ramos said. "We shouldn't have to sacrifice services for fiscal responsibility. To me that's just not a valid argument."
In Passaic, officials have gone so far as to consider charging fees for using the jaws of life at major car wrecks, said Assemblyman Gary Schaer, who is also the city's council president.
"At some point it's going to hit fundamental services, police, fire and EMS," said Schaer, a Democrat. "Although we might differ on how many times if at all municipalities should pick up garbage, or on building recreation centers, I think all of us would agree that every government includes, necessarily, protection."
Yoshi Manale, the administrator of Bloomfield Township, said his town has so far been able to stay within the 2 percent cap without substantially raising fees in its $72.5 million budget. But it has bumped up construction and health permit fees, and added an emergency service response fee for at-fault, out-of-town drivers involved in motor vehicle accidents in the town.
Manale said the key is for towns to become more efficient with what they have.
"Residents complain when services are slow or not efficient but are rarely willing to take on the additional cost to maintain those services without a fight," Manale said.
Local officials said the state's withholding of more than $1 billion a year in energy tax money due municipalities is another part of the problem. They said those funds could be used to bolster city budgets and lower taxes.
For nearly 100 years, cities received payments from energy companies with operations in their communities. But for the last 25 years, lawmakers have diverted some of that money to balance the state budget.
Dressel said if local governments got more from energy taxes and lawmakers eased up on mandates, there wouldn't be a property tax problem.
"This will be an ongoing struggle that local governments will have with state government, and a lot depends on how the economy does," Dressel said.