Forest Hill residents: Newark and New Jersey must lock arms to embrace the future
Published November 6, 2017 | Andaiye Taylor
Where it all went down. Luigi’s Italian Tradition, 561 Bloomfield Avenue, Newark, NJ. Image: M. Brian
This neighborhood profile is the first in Brick City Live’s series of contributions to Voting Block, a statewide collaborative reporting project. Montclair State University’s Center for Cooperative Media is organizing the project, whose New Jersey-based reporting partners include 15 hyperlocal news organizations, six ethnic-news organizations, plus WNYC, WHYY, NJ Spotlight and The Record.
Luke Hornblower, a one-year resident of Newark’s Forest Hill neighborhood, strode up to Luigi’s Family Restaurant on Bloomfield Avenue in Newark’s North Ward like a man on a mission.
Unbeknownst to Hornblower at the time, he walked right past former Arizona Congresswoman Gabrielle Giffords and her husband, astronaut Mark Kelly, as they quietly dined at a table near the restaurant’s entrance.
Giffords and Kelly were in town for Kelly’s speech the next day touting Democratic gubernatorial candidate Phil Murphy in his race against Republican Lieutenant Governor Kim Guadango.
The couple’s presence in the restaurant that evening was on-the-nose. We had invited Hornblower and a handful of other Forest Hill residents we’d profiled in our previous story about the neighborhood out to dinner to discuss how they thought the New Jersey governor’s race, which takes place tomorrow, would affect their day-to-day lives.
But soon after Hornblower took his seat at the table, he revealed that he had something else on his mind.
“You really need to study this tax plan,” he said, referring to the House Republican tax proposal that had been released earlier that day, and whose 75-page summary Hornblower, an attorney, had already perused.
“There’s a whole slew of deductions that are getting repealed. There’s a whole slew of deductions that are really significant…” he trailed off, gathered his thoughts, and then continued: “This is a major change. This is going to affect everyone’s behavior.”
Soon afterward, Forest Hill resident Byron Clark arrived. He was armed with a studiously prepared list of issues he thought were particularly important for Forest Hill residents to stay on top of.
With this smaller-than-expected group of just two residents at the table to talk about the governor’s race, it was easy for the discussion to veer to other topics, and it often did.
But when the conversation veered back to the governor’s race, we discussed the nature of the relationship between Newark and New Jersey, framed specific issues that Forest Hill residents should be mindful of, and appraised the reach and expansiveness of gubernatorial power in the state.
With the tax bill still front-of-mind, Hornblower offered an analysis of what it might mean for Forest Hill.
The new tax proposal would repeal the state and local tax deduction, but still allow taxpayers to write off the cost of state and local property taxes up to $10,000. Ninety-eight percent of U.S. taxpayers take the deduction, making it the most popular by far.
“Most of us [in Forest Hill] pay less than $10,000 a year in property tax, so it might not affect us so much,” said Hornblower. He considers low property taxes one of the attractive features of living in Forest Hill, an advantage corroborated by a number of the residents interviewed for our previous story.
But Hornblower pointed out that with the bill so fresh, and with so many deductions slated for elimination, the “winners and losers” of the proposal would take a little more time to sort out. Being unaffected by the state and local tax proposal shouldn’t lull Forest Hill taxpayers into thinking the bill would be inconsequential.
To wit, Clark had an idea for how state tax policy could advantage Forest Hill residents specifically. “What I want to see is a [state] tax credit for historic properties, like the one in Virginia,” he said, which enables that state’s taxpayers to take a 25 percent tax credit for historic rehabilitation expenses.
Hornblower concurred. “Owning a historic property is more expensive,” he said. “And there’s arguably a public interest in owning and maintaining those homes.”
If the Republican tax plan is passed in its current form, such a state-level change would become even more important for residents of Forest Hill’s historic district. That’s because the newly proposed federal tax plan would repeal the federal deduction for rehabilitation of historic homes, meaning that without state action, any tax credits for improvements Forest Hill residents in historic homes make to their properties would drop to zero.
Enumerating hyperlocal issues
Moving further into the list of proposals that could affect Forest Hill residents more specifically, Clark said he thinks people in his neighborhood should pay attention to how the next governor addresses open space.
Clark praised the millions of dollars in public and private investment the park has already received so far, and said Essex County has been a great partner in beautifying and maintaining the 360-acre park.
It’s the type of investment that he wants to see continue.
“Forest Hill is inextricably tied to Branch Brook park. It’s important that it receives capital investment and maintenance,” he said. “You can have the most beautiful park in the world, but if it isn’t carefully maintained, it can quickly become a problem.”
The property tax-funded Essex County Recreation and Open Space Trust Fund develops and maintains county parks and oversees historic preservation, and has also benefited from millions of Green Acres dollars, which come from the state and are used to fund open space acquisition and park development. In addition to ensuring Branch Brook Park is maintained, Clark also noted that county parks are expanding in Newark, in particular due to the expansion of Riverfront Park, which spans downtown and the Ironbound.
Another issue on which Clark and Hornblower agreed: introducing a mechanism for holding banks accountable for vacant, bank-owned properties.
“Those types of homes can really devalue a neighborhood,” said Clark. “You have to practically be an investigator to find out who owns them. No more hiding behind LLCs,” he said, referring to the practice of having limited liability corporations, and not natural persons, own residential properties.
While there is currently no law requiring real people to own residential homes, the state did adopt a law in 2014 authorizing fines on creditors that have foreclosed on residential properties but not maintained and secured them. While the law provides a framework for taking action against banks, enforcement of the statute is up to the municipalities.
The relationship between city and state
Clark also emphasized the symbiotic relationship between Newark and the State of New Jersey that requires a working relationship between state and municipal government, no matter who sits in the governor’s chair.
“They’re tied to each other,” Clark explained, calling Newark the “economic engine of New Jersey.” He underscored the amount of state aid that flows to Newark both for its municipal budget (just over $100 million for the 2017 fiscal year) and for the school budget ($742 million for the 2017-2018 school year), and the fact that Newark sends back a hefty amount in the form of income and sales taxes. Newark is also the state’s top “employment center” because of the 20 percent swell in its daytime population due to people commuting into the city for work—a vast majority for white-collar jobs.
Because of those facts, Clark explained, it is important for Newark and New Jersey to have a healthy and collaborative relationship. “If Newark wins, the state wins,” he said.
As an example, Clark cited Newark Mayor Ras Baraka and Governor Chris Christie working together to package and sell a proposal to bring Amazon’s second North American headquarters to the state. Although Jersey City, New Brunswick and Camden submitted proposals, the state elected to get behind Newark’s bid. The $7 billion package of tax incentives would draw from both state and municipal coffers.
A potential benefit of Newark winning the bid? “Housing demand,” said Clark. He thinks Forest Hill would have a good shot at capturing increased demand for homes if Newark becomes Amazon’s next headquarters.
Hornblower sees the potential for erosion of state autonomy in the proposed tax bill.
“The tax proposal is going to further weaken the position of states” overall, said Hornblower, because income taxes paid to the state will no longer be deductible under the current draft of the new law. Another possible consequence of the new proposal, said Hornblower, is that states might be more “gun shy” about raising property taxes, because doing so could become even more of a political third rail since homeowners would no longer be able to offset any increases.
In the next governor, a powerful figure
Clark underscored that the governor of New Jersey is among the most powerful in the nation.
That’s in part because New Jersey’s governor can exercise a line-item veto, giving him or her an an opportunity to approve the state legislature’s bills but reduce, or even eliminate, funding for specific aspects of those bills at his or her discretion. While most other state governors have some form of line item veto power, many have much more constrained power than the governor of New Jersey does.
New Jersey’s governor also appoints judges and the state’s attorney general, putting New Jersey in the minority of states whose governors select people to fill those consequential roles instead of their being elected.
Having this level of control over appropriations means having a significant say in funding for highly localized projects, programs and priorities. Everything from funding for specific non-profits, to personnel at state institutions of higher education, to college tuition grants, to funding for job-stimulating programs and much more can be affected by the stroke of the New Jersey governor’s pen.
Hornblower, who described himself as “highly independent” politically, plans to vote for Kim Guadagno.
“[The outcome of the race] probably isn’t going to affect me much. Policy is always secondary. For me it’s always about the person: who are we going to put in that perch?” he said.
Hornblower explained that he is not a fan of ex-Wall Streeters “trying to burnish their legacy by running for governor. I have a problem with that.”
He continued: “I voted for Obama twice. The thing about Obama was–forget about his policies–the guy was sincere. I watched the debate and I did not think that [Phil] Murphy was a straight talker.”
Clark said he thinks the outcome of the election will have an impact on him “because every governor, they have their own philosophy, they have their own agenda. They have tremendous power from a budgetary perspective. The person who sits in that seat controls billions and billions of dollars and there’s a certain amount of discretion that they have over those dollars,” he said.
The priorities he thinks are important affect Forest Hill residents, but they also affect many other New Jerseyans’ everyday lives: visceral and existential issues like public safety and criminal justice; job and commerce drivers like film tax credits or increasing train lines to and from New York City; economic and political issues like Newark’s delicate, and sometimes fraught, relationship with Port Authority; lifestyle-improving projects like provisioning for roads and other infrastructure.
“We don’t live on an island, people can live anywhere now,” Clark said, adding that New Jersey needs to be intentional about being competitive and making itself an attractive place to live. “The next governor, whoever that is, needs to implement progressive economic policies that build a solid economic foundation for New Jersey,” he said. “If the next governor can deliver that, I’m with that.”
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