Senators Sam Thompson (R-12) and Peter J. Barnes, III (D-18) called a non-profit organization’s report calling for sales and/or property tax increases in five New Jersey counties to generate new revenues to reduce operating deficits of the Port Authority Trans-Hudson (“PATH”) rail system a “nonstarter.”
The report, issued by the New York Citizens Budget Commission (“CBC”), recommends tax increases in Bergen, Essex, Hudson, Middlesex and Union counties to generate up to $233 million for PATH deficit reduction.
“The New Jersey Legislature has been committed to finding ways to reduce our residents’ tax burden,” said Thompson. “The CBC’s suggestion to increase sales or property taxes on millions of New Jersey residents to fund a service that few actually use is nonsensical.”
The CBC report suggests that an increase in the effective property tax rate of 2.09 percent in the five counties would generate the sought after $233 million, costing the owner of a home assessed at the median value of $360,400 in Hudson County $180 per year in additional property taxes.
In a letter to the Port Authority of New York and New Jersey, the operator of the PATH system, the legislators urged the Authority to disregard the CBC’s report.
“It’s hard to imagine the Legislature supporting any effort to enact the tax increases recommended by the CBC,” said Barnes. “Given the already high tolls that commuters utilizing Port Authority crossings pay, it would be in the best interest of everyone for the Port Authority to not waste resources considering a proposal that will not receive legislative approval.”
The letter from Thompson and Barnes to Port Authority Executive Director Patrick Foye follows:
April 29, 2014
Mr. Patrick J. Foye
Port Authority of New York and New Jersey
225 Park Avenue South
New York, NY 10003
Dear Mr. Foye:
The New York Citizens Budget Commission (“CBC”), a non-profit organization focused on the finances of government entities in New York, has released a report (“Financing PATH: Options for Deficit Reduction“) calling for higher sales and/or property taxes in several New Jersey counties to generate new revenues that would be dedicated to reducing the operating deficit of the Port Authority Trans-Hudson (“PATH”) rail system.
Specifically, the CBC recommends increasing the sales tax from 7 percent to as high as 7.43 percent in five New Jersey counties — Bergen, Essex, Hudson, Middlesex and Union — to generate up to $233 million for PATH deficit reduction.
As an alternative to increasing the sales tax, the CBC suggests an increase in the effective property tax rate of up to 2.09 percent in those counties to generate an equivalent stream of revenue. The CBC suggests that such an increase would cost the owner of a home assessed at the median value of $360,400 in Hudson County an additional $180 per year in property taxes.
As New Jersey legislators representing Middlesex County, one of the counties targeted for tax increases by the CBC, we feel compelled to respond considering a reported statement by a Port Authority spokesman that the CBC’s report would be reviewed by the Authority.
While we certainly believe that efforts should be made to streamline and increase transparency of Port Authority operations and to realign services when prudent, we cannot support the CBC’s suggestion that we significantly increase taxes on the nearly 4 million residents of Bergen, Essex, Hudson, Middlesex and Union counties as a reasonable solution to reduce PATH’s operating deficit.
Garden State residents already pay the highest property taxes in the nation and shoulder one of the highest overall tax burdens. Any suggestion that we increase sales or property taxes on a significant subset of our residents to fund a service that very few of those residents even use is a nonstarter.
It should be noted that the five counties targeted for tax increases by the CBC encompass all or parts of more than half of New Jersey’s legislative districts, which might offer some insight into the future prospects of any legislative effort to advance such a proposal.
In conclusion, we strongly suggest the Port Authority not squander any of its limited resources reviewing a report whose recommendations have little if any chance of being enacted.
Samuel D. Thompson, Ph.D
Peter J. Barnes, III
Download (PDF, 602KB)