Several New Jersey towns are charging so-called 'user fees' for services like trash collection or emergency response. State Senate President Steve Sweeney says, "'User fees' are just a cleverly conceived way to hide from folks that their taxes are going up yet again. The property tax cap was put in place to prevent these kinds of things from happening. It is not there so that local officials can find new and creative ways to get around it."


The 'cap' to which Sweeney is referring is the 2% cap on property tax increases. Sweeney sponsors a bill that would prevent local officials from moving spending items traditionally covered by the property tax levy, like trash collection, off the property tax bill into a 'user fee' to get around the state's 2 percent property tax cap. Instead, services shifted from a property tax base to a 'user fee' base would continue to be counted as part of the cap.

"You can create all the fees you want, but they're going to count against your cap," explains Sweeney. "You can do it. It's just going to count against the cap which means you shouldn't do it (but) just saying, 'You shouldn't do this,' isn't getting us anywhere…..Unfortunately towns figured out a way to get around the property tax cap, but a fee is a tax."

Towns currently charging the fees would still be permitted to do so this year, but any municipality that wants to charge the fees again next year would have to bake them into their budgets while staying beneath the cap.

Since the enactment of the 2% cap in 2010, seventeen Garden State municipalities have gone to referendum asking voters to override the cap, with several of those attempts tied to the creation of new 'user fees' to fund services that would be taken off the property tax bill if the vote failed, but would continue to be publicly provided as they were before. Sweeney says current law isn't clear about this practice, but says his bill would make it clear that any services that get shifted out of the property tax base to a user fee are still subject to the 2% cap.

"Hard working families in this state need a break," says Sweeney. "They are already, on average, paying 20 percent more in property taxes under this administration. They don't need their property taxes increased in other ways. When we eliminate these kinds of loopholes and implement our proposed 10% property tax cut, we are going to start to see real relief for New Jersey's middle class."

Last month, on Townsquare Media's 'Ask the Governor' program, Governor Chris Christie promised to sign the bill if it passes both houses of the legislature. The Assembly version of the bill has yet to receive a committee hearing and according to a spokesman for the Assembly Democrats, no action on the measure is currently scheduled.