Bumped from late last night – Rosi
NJ.com is back with another superficial listicle meant more to garner clicks instead of enlightenment.
This time, they’re showing that property taxes in New Jersey are high. Well, of course they’re high. We have more than 1,000 government agencies, we have duplication in services that has only increased and becomes more costly as once wooded, rural, or vacant land gets developed. Towns with limited ability to create new revenue streams have seen municipal revenues diverted to the state for decades. Towns that do have an ability to create new revenue streams often defer collection of that revenue for years (!) in order to attract developers. Towns have seen their transportation trust fund appropriations decline, despite motorists now being taxed 23 cents more per gallon for the TTF.
We have 46 percent of government services paid for by property taxes and 54 percent paid for by state taxes and other fees, according to the New Jersey League of Municipalities.
So when NJ.com compared the highest average property tax bills with the median income in that town, it offers an irresponsible and intellectually dishonest look at our regressive property tax structure.
Take my native Highland Park, for example. The problem with NJ.com’s scant datapoint is that families with the median household income of $68,000 are not paying average annual property tax bill of $11,000. This irresponsible reporting purports to apply evenly the same metric – percentage of property tax bill to household income — but it completely fails to portray a full understanding of how our tax structure works. For example, in New Brunswick, the average property tax bill is listed at around $6,800, but that’s what a homeowner of a $300,000 home pays, not what a the average $38,000/year household income earner pays.
In towns like New Brunswick and Highland Park, higher-income households shoulder a greater tax burden because these dense, urban towns have vast income diversity and a high number of renters and lower-income households who pay fewer tax dollars, even if they are otherwise unfairly and disproportionately over-burdened. It’s not fair or accurate to hold up the median household income against the average property tax bill, particularly when 60 percent of Highland Park’s residents don’t have property tax bills, but rather pay property tax through their rents. In New Brunswick, the rental population is roughly 80 percent.
To quote the NJ League of municipalities, “New Jersey’s over-reliance on regressive property taxes to fund local needs can be traced to a history of municipal revenues being diverted. There was once a time when local services were funded by many sources beside the regressive property tax.”
This kind of reporting is really outrageous, but it illustrates a common misperception and something we are all going to have to face. But addressing perception is no match for real property tax relief and reform, something our legislature has been unwilling to take on.
Further your information:
- Institute on Taxation and Economic Policy (2015), Who Pays?
- “New Jersey’s Upside-Down Tax System: The Lower Your Income, The More Of It You Pay,” New Jersey Policy Perspective blog.
- “A Short And Simple Glimpse At The Property Tax In New Jersey,” New Jersey League of Municipalities