Recently, over 3,900 signatures were submitted to the Clerk of Jersey City demanding a special election to decide whether a 20-year tax abatement should be granted to the Millennium Towers project. This election will likely occur in January 2001. Surely, tax abatements are controversial and the debate between now and January shall be intense. I urge everyone to consider all the arguments, pro and con, because it will be a very important vote you cast in January.
The issue I raise today, however, concerns the fundamental unfairness of tax abatement laws as presently written. Specifically, properties that receive tax abatements make a pre-determined yearly payment directly to the municipality during the term of the tax abatement. Most importantly, they do not pay county or school taxes and the property is not included in the ratable base. The ratable base is the total value of all the commercial and residential property in the City. The ratables, determine the tax rate that non-abated property owners must pay. In short, when municipal, school and/or county taxes rise, the only people that pay those increases are property owners that are not abated.
The law should be amended to allow a municipality to initially reduce the taxes or an assessment on a project. Then, once reduced rate or assessment is set, the property should be considered part of the ratable base. By this simple change, we still encourage development yet require new projects to share the burden of subsequent municipal, school and/or county tax increases.
Obviously, the result of more property owners paying towards any given tax increase is a lessening of the burden on the individual taxpayer. This amendment would help bridge the gap between the new communities rising in the City and the traditional neighborhoods that continue to struggle. Moreover, this legislation would encourage those property owners that enjoy tax abatements to become more involved in the issues directly tied to taxes. In other words, if they are subject to tax increases they will tend to get more involved in the government process.
I have asked our State Legislators to pursue this amendment and I encourage everyone to voice your opinion concerning this issue.
Robert F. Cavanaugh, Jr.
Ward A Councilman