New Jersey Voters Rebel Against High Taxes, Debt

Published February 1, 2008

New Jersey voters have said “No” to constitutionally dedicating a portion of the sales tax to fund property tax relief programs and to issuing debt to fund stem cell research. The ballot measures were defeated by identical percentages, 53-47.

The November vote marks the first time in 17 years New Jersey voters defeated public questions that appeared on a general election ballot.

The election results were a stinging rebuke to New Jersey’s Democratic Party leadership, which placed the questions on the ballot and campaigned for their passage.

Two other ballot questions passed. One authorized state government to issue $200 million in bonds to purchase open space and preserve farmland. The other question removed archaic language from the state constitution.

Discontented Voters

Political observers said the results are a sign of voter discontent with New Jersey’s fiscal policies and taxes, particularly the local property tax.

New Jersey has the highest property taxes per capita in the nation, according to Congressional Quarterly’s State Fact Finder 2005. In addition, the state’s $33 billion in bonded debt is the fourth-highest total among the 50 states, according to Moody’s Investor Services.

The administration of Gov. Jon Corzine (D) estimates New Jersey’s budget contains a $3 billion structural deficit.

Those gloomy statistics apparently were on the minds of voters as they cast their ballots.

Stunned Political Leaders

The defeat of the sales tax dedication was particularly stunning to Democratic Party leaders. Voters rejected the measure even though it did not mandate new spending or higher taxes. The proposal was to constitutionally dedicate a portion of the existing sales tax to unspecified property tax relief programs. Only one year earlier, voters had approved an identical dedication measure.

“What a difference a year makes,” said Jerry Cantrell, president of the New Jersey Taxpayers Association. “Last year’s ballot question was voted on while the Legislature was holding a special session to devise a property tax reform program. I think that voters were willing to give the Legislature and the governor the benefit of the doubt, so they approved the question hoping that it would be part of meaningful property tax reform.

“But the special session produced no significant reforms,” Cantrell added. “By defeating the sales tax dedication, the voters, in effect, gave a failing grade to the special session’s meager initiatives.”

Angst over Property Taxes

Voting on local ballot initiatives also illustrated the prevailing angst over property taxes. Municipal and county programs to purchase open space–financed by special assessments on the local property tax–had become popular over the years. In November, however, only one-half of the questions proposing to create or increase existing open space funds passed.

It was the worst success rate since 1988, when the funds were created.

The proposal to issue $450 million in bonds to fund stem cell research was defeated soundly in spite of polls consistently showing broad support for stem cell research. Corzine personally contributed $150,000 to the unsuccessful campaign promoting the ballot question.

Several concerns fueled opposition.

Some voters opposed adding to the state’s already-heavy debt load. Others believed stem cell research should be funded through private capital, not public subsidies. Because the program envisioned five separate research centers, some voters also worried they would be paying for another government boondoggle. Some opposed on moral grounds the embryonic stem cell research the bond act would have permitted.

Underestimated Anger

Steve Lonegan, executive director of the New Jersey chapter of Americans for Prosperity, said voters were unusually attuned to the ballot questions.

“In the past,” Lonegan said, “it was considered a ‘given’ that statewide ballot questions would pass with comfortable margins. The state’s political leadership vastly underestimated voter anger and concern over government spending and high property taxes. With a little effort and some modest resources, we were able to galvanize these sentiments into political action.”

Lonegan’s organization paid for radio commercials against the three ballot questions that affected government spending. It also placed lawn signs around the state urging voters to vote against all the ballot questions.

Gregg M. Edwards ([email protected]) is president of the Center for Policy Research of New Jersey.