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Statehouse Bureau Staff The Record, Star Ledger ‘Gov. Chris Christie, N.J. legislature reach deal on 2 percent property tax cap’ Published: Saturday, July 03, 2010, 12:32 PM Updated: Saturday, July 03, 2010, 12:37 PM TRENTON — The governor and Senate legislative leaders have struck a deal on property tax reform that includes a 2 percent cap on annual increases with four exceptions, three sources with knowledge of the negotiations said. The four exceptions are rising costs of pensions and health care, school enrollment increases and debt payments. Towns would also be granted leeway in the event of an emergency, such as a natural disaster, two sources said. The agreement, which has not been officially announced by the Gov. Chris Christie's office, would end a three-day standoff over how to structure tax increase limits in a state with the highest property taxes in the nation. Assembly Democrats said they have not reached an agreement yet. “There is no agreement," Assembly Democratic spokesman Tom Hester Jr. said. "The speaker (Assembly Speaker Sheila Oliver) has had no conversations with the governor on this subject.” The deal would also have to be approved by both houses of the Democrat-controlled Legislature. Christie and lawmakers arrived this morning at the Statehouse for the third day of a special joint legislative session the governor called to force a showdown over property tax reform. At 10 a.m., Republican senators huddled in caucus while Senate President Stephen Sweeney (D-Gloucester) met with Christie. After he left, Republican minority leaders from both houses entered the governor's office. Christie exited a third-floor meeting with Republican senators at about 11:45 a.m. A gaggle of reporters trailed him to the elevator, but the governor revealed little. "We'll see," he said when asked if there was a deal. Christie's spokesman would not comment. Republican senators huddled in caucus while Senate President Stephen Sweeney (D-Gloucester) met with Christie. After he left, Republican minority leaders from both houses entered the governor's office. Democrats and Republicans are at odds over the structure of property tax limits. After Christie on Thursday said he would accept a statutory limit on local property tax increases - by law rather than by constitutional amendment - the sticking points remained the exemptions to the cap. Sweeney said it does not make sense to include costs beyond a town's control - such as energy costs and health care - while Christie described those type of exceptions as the holes in a "swiss cheese" policy. Sweeney previously questioned why the percent increase was not lower than 2.5. Senate Minority Leader Tom Kean (R-Union) said the Republicans were ready to work. Sweeney showed up around 8 a.m., Oliver arrived at 10:45 a.m., while the only other Democratic lawmaker seen in the building was Sen. Jeff Van Drew (D-Cape May). Sweeney said the two had a scheduled meeting. Van Drew joked with Republican senators outside the Senate chamber about wearing bathing suits underneath their business clothes while they worked over the July Fourth weekend. "If I have to, I'll be here everyday," he said. By Lisa Fleisher and Chris Megerian/Statehouse Bureau More coverage: • After day of impromptu meetings in Trenton, fate of proposed property tax cap remains unclear • N.J. Assembly panel requests more time, testimony to consider Gov. Christie's tax cap • Special N.J. legislative session kicks off property tax cap showdown • Gov. Chris Christie's prepared speech to the Legislature