New Jersey continues to own the dubious distinction of having the highest property taxes in the nation. One can look at the numbers from any number of perspectives (median tax, median tax as percentage of household income, etc.) and still return to this abysmal fact. Here are a couple of articles that present the hard cold numbers rather concisely:
http://www.forbes.com/2009/01/23/taxes-homes-property-forbeslife-cx_mw_0123realestate.html
http://articles.moneycentral.msn.com/ Taxes/Advice/PropertyTaxesWhereDoesYourStateRank.aspx
http://www.usnews.com/usnews/biztech/articles/061228/28top20taxpaid.htm?s_cid=msnm:28top20taxpaid
Most of us realize that the main reasons property taxes are so high in our state are, first and foremost, that the property tax is the main source of revenue used to pay for public education in non-urban areas. Second, the property tax is also the main source of revenue for county and municipal services. The path that led us to an oppressive level of property taxation in New Jersey has not happened overnight. Correspondingly, there have been many potential solutions promulgated over these many years, some of which will be mentioned forthwith. Invariably, any potential remedy to the property tax crisis in New Jersey rests with state government in Trenton. After all, it was state government that created the system that causes us to rely so heavily on property taxes and in most any substantial reform process, it is state government that must take action. Heretofore, our representatives in Trenton have not displayed the political will to make the tough decisions, and accordingly we have only seen various relief measures put into place that simply nibble around the edges of the problem and in many cases (including this year’s recently completed state budget process) evaporate into thin air as state government attempts to balance their books on the backs of property taxpayers.
Here are some ideas that have been put forth that certainly would ameliorate some of our property tax issues and should be worthy of further discussion:
• Eliminate County Government: There is no question that county government is rife with patronage positions and other practices that waste taxpayers’ dollars. Additionally, there is duplication in the services provided via state, county and municipal government. State and Municipal governments could assume the responsibilities of county government and eliminate these redundancies. Precedents for eliminating County Government exist. Connecticut did it in the 60’s and Massachusetts did in the 90’s.
• Provide a more equitable method of state educational aid to school districts: The infamous Abbott v. Burke case decided by the NJ Supreme Court resulted in providing 31 “Special Needs” school districts with half of the billions of dollars in school aid coming from State government in Trenton. The remaining 580 school districts must share the remaining half. Additionally, in this decision the court mandated that these “Special Needs” school districts should receive a dollar amount in aid so they could spend on a per pupil basis what mirrors the highest (not average) spending districts in the state. By the way, the recent changes to the school funding formula championed by Jon Corzine and the Democrats in Trenton will do absolutely nothing to alleviate property tax burdens because the lion’s share of state aid will still find its way predominantly into those very same “Special Needs” Abbott school districts. If state school aid was disbursed on a per student basis we would see a dramatic reduction in property taxes for most taxpayers in New Jersey.
• Consolidate Municipalities and School Districts: Last time I checked there were 566 municipalities and 611 school districts in New Jersey! Intuitively we understand that each carries there own elected governing bodies, administrations, personnel, buildings, equipment, etc. Some of these towns and school districts share services quite admirably, but there can be no doubt that additional savings could be accomplished if some of these entities were merged. Home Rule is a concept that has deep roots here in New Jersey, but we must understand that with it comes greater cost in most instances. State Government is already using the stick as it is cutting aid to some of the smaller municipalities and districts in a not so subtle attempt to get them to merge. Perhaps if there was a greater incentive ($$) coming from Trenton; the carrot, if you will, maybe there would be a greater rush to the consolidation threshold and ultimately a corresponding abatement of our property tax crisis.
• Provide an Alternative Revenue Source for Schools, Counties, and Municipalities: Yikes, here’s a real tough one! One can make a legitimate argument that the property tax is the most hated tax of all.
http://articles.moneycentral.msn.com/Taxes/Advice/AmericasMostHatedTax.aspx
Maybe it is hated because it is also so unfair. The property tax is a regressive tax because it does not take into account one’s ability to pay it. The income tax (the more you earn, the more you pay) and the sales tax (the more you buy, the more you pay) although certainly no fun are perhaps “fairer”. Should there be a shift away from reliance on the property tax to a “more fair” method of taxation to pay for the function of our schools, counties and municipalities? Perhaps. However, this would require a group of politicians in Trenton to raise your taxes. Even if it meant a corresponding reduction in property taxes, I’m not sure there is the political will for such a proposal. Keep in mind that Governor Brendan Byrne pushed through a new state income tax in the 70’s with the promise that it would stem the tide of escalating property taxes. That worked out real well, didn’t it?
Well, the aforementioned are four general categories that could lead to desperately needed property tax reform for New Jerseyans. Any or all would take some bold initiatives from our state leaders, and history would dictate that no one in Trenton has been ready to step to the plate. That leads me to the topic of my next entry: Citizens’ Constitutional Convention for Property Tax Reform. Stay tuned.
Have any thoughts on property tax reform for New Jersey? I’d like to hear them.
Mayor Martin Marks Campaign Blog 
July 22, 2009 at 2:20 pm |
I agree that sharing services is a way forward to securing lower property taxes, but if we’re going to share services, wouldn’t it just be more efficient to abolish municipalities instead of counties? I know it goes against New Jersey’s home-rule obsession, but municipalities, like the counties, are fulled of overpaid, underworked, less qualified workers whose functions could be taken over by a streamlined county. There are plenty of states where only the most populous and urban of towns and cities are municipalities.
July 22, 2009 at 2:28 pm |
Doug, you make a good point. However, it is usually the more rural states that have the strong centralized County Governments that provides services. In a densely populated state like NJ (and Conn. and Mass) I think that municipalities can provide services more efficiently (and more fairly). Whether we need 566 of them or not to do so is also a good point of debate.
August 23, 2009 at 12:42 am |
Mr. Marks:
Would you comment on moving the school budget and board elections from April to November, such that we would get a larger turn out. This would provide a greater participation in our Democracy.
Second point, what is your view on any state mandates that the state does not fully fund.
Thanks
August 23, 2009 at 3:17 pm |
I would have no problem moving the Board of Ed. elections to the November ballot. It would increase voter participation in that particular election and also save some taxpayer dollars by eliminating a separate election in April. However,……….Here are some additional thoughts:
1- All things considered, don’t you think it is a shame that we need to do ANYTHING to encourage voters to go to the polls to excercise their right and responsibility as citizens? Think about what is going on in the world right now. Afghanis and Iraqis are now going to the polls, even with the threat of personal harm hanging over their heads. They proudly display their ink stained fingers that signifies they have participated in the democratic process that was not their legal right for so many years. Here’s a thought: Maybe we should also do the finger in the ink process here in America. On Election Day, if you do not have a purple finger by the time the polls close, SHAME ON YOU!
2- I have always found the Board of Election vote a bit peculiar. Think about it. At all other levels of government (Federal, State, County, and Municipal) we elect individuals to office, and one of their principal responsibilities is to enact a budget without voter approval. The electorate has an opportunity to comment on these budgets, yet they have no direct vote. Why is this different for the Board of Education? Sure, I know that the funding of public education composes the largest percentage of your property tax bill in most towns, yet there still seems to be an inconsistancy here.
3- And while we’re at it, if a school budget goes down to defeat by the voters, why is it then sent to the municipal governing body to make cuts? The municipal governing body has had little interaction or focus on the school budget to that point and then they are now responsible to evaluate and then make a cut in a relatively short period of time. By the way, that cut is just a dollar amount and does not involve line items in the school budget. The Board of Education now just reallocates to the various line items as they see fit, OR they make an appeal to the State Department of Education which can nullify all or some of the cuts that the municipal governing body has made. Quite a convoluted process that merits some state scrutiny and perhaps some significant changes.
As for the state mandates: As a mayor for nine years in Scotch Plains it would infuriate me that the state would continually MANDATE additional programs and spending yet call it something other than a MANDATE, thereby absolving themsleves of the responsibility to pay for it. I would tighten up the language on “State Mandate, State Pay” and have it written in blood in our State Constitution (so our NJ Supreme Court cannot continue to be complicit in burdening taxpayers) so that any new program required by the state is paid from state coffers and nowhere else.
August 24, 2009 at 12:43 am |
Mr. Marks:
Thank you for your responses.
Its good to hear that you would have no problem moving the election, but will you support a bill or author a bill to move the election to November?
I have to admit it the “blue finger” idea is an idea, but how can you get them away from their reality TV or ball fields? Do you expect shame alone to bring them out. The last school budget vote had only 17% turnout. The township budget meetings were attended by less people than the fields that night or the opening of the farmers market! The Afgans & Iraqis know what freedom is and is not. We take it for granted. Your “blue finger” idea would have an impact, if the British were marching through Scotch Plains again. Do you have any other ideas other than ink on fingers.
Yes the vote on the School Budget is pecular, but until our elected officials change it or give us I&R then this is what we have to live with. The same applies for should a budget get defeated.
Should you win, I want to know what to expect from you on these topics. It is one thing to know about the problem its another to do something about it.
I was pleased to hear your stand on state mandates and look forward to hearing you bring up a bill in Trenton, once again should you win.
August 24, 2009 at 2:20 am |
Yes, I would sponsor legislation that would move the BOE election from April to November. Additionally, I have been a proponent of requiring the school district and county to send their own tax bills instead of the municipality being the “clearinghouse” for all. This has been proposed in the legislature before, yet never made it to the governor’s desk.
As for the finger in the ink suggestion, that was a bit of hyperbole meant to stress a point. Doubtful anything like that would happen here in America.
August 25, 2009 at 12:04 am |
Mr. Marks:
Thanks for the response(s).
If you have any ideas about a greater voter turn out I would appreciate your thoughts. You did not mention your stand on I&R.
The polls are looking promising in your favor.
It appears that you may have to manage your practice here and Trenton work at the same time!