Why are NJ property taxes the nation’s highest?

www.GardenStateFamilies.org

By William Eames

For many years, the Tax Foundation has listed New Jersey as having the nation’s highest property taxes. 

 [1]  Why are they so high?  And why do most folks believe they are powerless to do anything about it? 

      First, is it true?  NJ property taxes are higher, per capita, than others.  The Tax Foundation’s ratings[2] rank New Jersey #1 in the nation (highest property taxes per capita) for each of the past five years.

• 2018:  NJ ranks #1 (highest) in property taxes; #50 (worst) in overall tax climate. (data from 2016)  For reference, in property taxes, California ranks 34th!

• 2017:  NJ ranked #1 (data from 2015)[3]; In overall taxes, NJ Ranked 50th (worst).

• 2016:  NJ ranked #1 (highest property taxes per capita)(data from 2014)[4]

• 2015: NJ ranked #1 (highest property taxes per capita)(data from 2013)[5]

• 2014:  NJ ranked #1 (highest property taxes per capita)(data from 2012)[6]

Seven Key Reasons 

      Most folks tend to blame our high property taxes on schools or the “Mount Laurel” school funding decisions by the courts.  But there are other causes.  Susan Livio of NJ Advance Media, writing last year for NJ.com[7], listed these:

1. Our population density – of the states, NJ has the highest population density.[8]

2. High labor costs – in the Industrial Era, it was demand that produced high labor costs, but during the Progressive Era and beyond, labor rules and guaranteed benefits have put us near the top.

3. Generally high cost of living – The population density, proximity to both New York and Philadelphia, and demand for housing, utilities, high quality medical services … all boost costs.

4. Property taxes pay most of the costs – While New Jersey taxes just about everything imaginable, it has historically grouped municipal operations, county operations, the lower courts, jails, and schools under the “property tax” umbrella.  In other states, some of those costs are paid by sales taxes or local income taxes.

5. Home rule – This is a point of debate.  Some argue having 565 municipalities, 21 counties and 605 school districts increases costs; others argue that having decision makers close to the taxpayers (“we know where you live”) helps hold spending down. 

6. Public worker pensions & health care costs – This is not in dispute.  The public policy decisions in the 1930s and 1940s to allow governments to offer defined benefit pensions and lifetime health benefits to public employees … and often keep those costs off budget … are now wreaking financial havoc.  Those policies allowed governments to skip putting money into pensions and health funds paycheck by paycheck, and allowed them to pass costs forward, only paying once folks retired.  Kick the can down the road.  This is changing slowly, but the damage of under-funding these programs may result in fiscal insolvency in the next decade.

7. Education costs – New Jersey has good schools, based on the reports.  But it costs a lot to get those results, and decisions in the 1970s to significantly boost starting salaries boosted costs significantly.

A Deeper Look

      But if we take a deeper look, our position as one of the original colonies, as a center for the Industrial Revolution, and our dubious reputation for hosting several of the world’s most progressive liberals (think Woodrow Wilson) all play a role.  Consider:

• In 1875, the 1844 NJ Constitution was amended by adding the infamous “thorough and efficient” clause:  “The [NJ] Legislature shall provide for the maintenance and support of a thorough and efficient system of free public schools for the instruction of all the children in this State between the ages of five and eighteen years.”  This obligation was carried forward, verbatim, into the 1947 rewrite of the NJ Constitution.  The intent was an outgrowth of this colony’s Quaker origins, and a recognition of the importance (as observed by Alexis de Tocqueville) of enabling each citizen to read.  At the time, the verbalized intent was for the State to pay education costs.  But almost immediately, the State began pushing those costs to towns.

• New Jersey’s own Woodrow Wilson, - as president of Princeton University, then as governor of NJ, 1911-1913, then as President – brought us Progressive policies and liberal labor benefits.  (Including but not limited to labor agreements as policy, like project labor agreements and arbitration, creation of the NJEA and other ‘mandated fee’ associations.)

• In 1947, New Jersey’s Constitution was radically revised.[9]  The process was steered by self-admitted progressives within the legal and court system, who openly bragged of their desire for independence for the Courts and of their Progressive leadership and insight.  Chief among the revisions was a complete reorganization of the judicial branch, abolishing the state’s former judicial system and its replacement with an entirely new and independent judicial structure.  Heavily influenced by a well-known and politically powerful attorney named Arthur Vanderbilt, by 1950 the NJ Supreme Court had proclaimed itself as having the exclusive authority to control its own affairs, to interpret the NJ Constitution and to exercise unprecedented new rule-making powers “not subject to overriding legislation.”

  As Chief Justice, Vanderbilt wrote more than 200 opinions, always advocating for a living/breathing judicial system not bound by past precedent or “old” legal doctrines, but one that was responsive to society’s contemporary needs.  That legacy includes court rule-making such as the Council on Affordable Housing (COAH) and the Abbott school district funding issues.

• In 1972, a group of enterprising attorneys, urban school districts and cities sued the State and Gov. Cahill[10], alleging that the State’s system of funding free public schools was unconstitutional, namely, whether the equal protection and education clauses of the State Constitution were being violated by New Jersey's statutory financing scheme.[11]  According to the court, the argument was that the then-current system of financing public education in New Jersey relied heavily on local property taxes, producing wide disparities in educational expenditures.  The plaintiffs contended that public school education is a state function which must be afforded to all pupils on equal terms. But the state was funding districts on a formula basis that was not “full” funding – forcing each town to tax property to make up the difference (sometimes nearly 80% of the school budget). Thus, actual spending per pupil varied significantly, which they argued violated the “thorough and efficient” clause, as well as the “equal protection” clause of the U.S. Constitution’s 14th Amendment. The Court used statistics to document “a distinct pattern in every county in the State. In most cases, rich districts spend more money per pupil than poor districts,” and argued that “most of the poorer communities must serve people of greater need because they have large numbers of dependent minorities.” The Court ruled that “The Education Clause was intended to do what it says, that is, to make it a state legislative obligation to provide a thorough education for all pupils wherever located.” 

    In the 1975 Robinson v. Cahill decision, New Jersey’s Supreme Court began to exercise “the unprecedented new rule-making powers not subject to overriding legislation” that it had given itself through interpretation of the 1947 Constitution. The Court said, “each child in the State has the right to an educational program geared to the highest level he is capable of achieving, permitting him to realize his highest potential as a productive member of society.” It also said, “that pupils of low socio-economic status need compensatory education [greater funding than others] to offset the natural disadvantages of their environment.” … “Providing free education for all is a state function. It must be accorded to all on equal terms,” the Court said.

   The conclusion was, “The State must finance a "thorough and efficient" system of education out of state revenues raised by levies imposed uniformly on taxpayers of the same class.”  The Legislature and Governor were directed to come up with a new tax plan to equally fund the education of every student.  They didn’t.

• By 1985, the inequities had not been resolved, and a new lawsuit was filed, “Abbott v. Burke”.  This time, the Court named 28 specific school districts (commonly called “Abbott districts”[12]) “that were provided remedies [by the court] to ensure that their students receive public education in accordance with the state constitution.”

• In 1990, another lawsuit was filed which became known as “Abbott II”.  The Court ordered the state to fund the (then) 28 Abbott districts at the average level of the state's wealthiest districts.

A Wikipedia article[13] summarizes in this way:  

Abbott districts are school districts in New Jersey covered by a series of New Jersey Supreme Court rulings, begun in 1985, that found that the education provided to school children in poor communities was inadequate and unconstitutional and mandated that state funding for these districts be equal to that spent in the wealthiest districts in the state.

The Court, in Abbott II and in subsequent rulings, ordered the State to assure that these children receive an adequate education through implementation of certain reforms, including standards-based education supported by parity funding. It added various supplemental programs and school facilities improvements, including to Head Start and early education programs.

      In the time since these decisions, many structural changes have been made, and vast amounts of public money have been spent.  But property taxes remain the highest in the nation, most funding from schools is still from the property tax, and school funding is anything but “equal.”

      Finally, Federal tax policy that favored a few “high cost” states, allowing them to write off property taxes against federal income tax obligations, allowed a few states including New Jersey to skirt responsibility for their spending.  There are arguments on both sides of the recent tax changes that took this write-off away, but while it lasted, it gave New Jersey towns the ability to spend more while lessening the threat of taxpayer revolt.

Why do most folks believe they are powerless to do anything about high property taxes?

      Many citizens say they’re not actively engaging in policy issues because they’re too busy and stressed from all the obligations of living in such an intense part of the country.  While we’re all stressed, in my experience, it would be more accurate to say the obstacle is that they’ve never gotten involved.  That’s not a criticism, but an observation.  When we run orientations, or take “newbies” to a public meeting or to a legislative hearing, they often report that it wasn’t intimidating at all. 

      Many volunteer to go to another, or to several, because the “live action” beats television any day of the week … and there are no commercials.

      This, however, is very serious business, with very serious consequences for Christians, Jews, and ordinary citizens.  That’s because those who can gain from the favors of legislators work every day to assure their future economic benefit.  More often, these days, their efforts also restrict our freedoms.

      Want some fun?  Research the origin of this quote:  “If not us, who?; If not now, when?”  But it deserves some really serious consideration.  “Politics” is the civil side of policy.  You can be absolutely certain of another quote by Edmund Burke:  “The only thing necessary for the triumph of evil is for good men to do nothing.”  You can rest assured that evil men are active.

      The Center for Garden State Families is a starting point.  But a few active citizens isn’t enough.  Emails to legislators are good, but they’re not enough.  A check for $25 is good, but it isn’t enough.

      Get involved.  No experience necessary.

      God Bless.

# # # 

[1] The Tax Foundation, Tax Foundation

[2] The Tax Foundation, 2018 Facts & Figures

[3] The Tax Foundation, 2017 Facts & Figures 

[4] The Tax Foundation, 2016 Facts & Figures 

[5] The Tax Foundation, 2015 Facts & Figures 

[6] The Tax Foundation, 2014 Facts & Figures

[7]see http://www.nj.com/politics/index.ssf/2017/02/7_reasons_why_njs_property_taxes_are_highest_in_us.html

[8] see https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_population_density 

[9] see https://www.judiciary.state.nj.us/courts/supreme/vm/vanderbilt.html 

[10] Robinson v. Cahill litigation 

[11] see https://law.justia.com/cases/new-jersey/appellate-division-published/1972/118-n-j-super-223-0.html

[12] see https://en.wikipedia.org/wiki/Abbott_district

[13] see https://en.wikipedia.org/wiki/Abbott_district

*Mr. Eames has worked as an instructor for the Center for Self Governance and has been a candidate for NJ Senate, LD 27.  He has served as CEO of the New Jersey Tooling & Manufacturing Association and the Greater Atlantic City Chamber of Commerce.

Say NO to the Democrats' Sanctuary State scheme

Democrat Phil Murphy and his party are planning to turn all of New Jersey into one big "Sanctuary State" -- making it a no-questions-asked destination for folks here illegally.  In last week's terrorist attack in New York City, we witnessed the latest example of what happens when our government fails to properly vet people entering our country.  Now Murphy and the Democrats want to dial that process down and have no vetting at all.

 

A 'sanctuary state' will mean a huge influx of people who need the social services safety net more than average.  The Democrat gubernatorial ticket has promised to impose a so-called 'millionaire's tax' that will chase away those who currently fund the state's social safety net.  Those who are left... the middle class who can't leave because of a job, or because they can't sell their home for what they paid for it, or because their child wants to finish school -- they will have to make up for the shortfall in higher taxes.

That won't be easy, because at 26.1% of income, the cost of living in New Jersey is, according to Bloomberg, by far the most expensive in the nation.  Meanwhile, state household income is nearly seven percent lower than it was in 2008 and has only grown by a little more than one percent since then. 

Those coming to the new 'Sanctuary State' of New Jersey will enter the workforce of the gray economy, where the minimum wage doesn't apply.  But for everyone else it does -- which will leave trade union workers, manufacturing, medical care and health workers, service industry workers, and mothers with part-time jobs all at a disadvantage when competing for a job.  It will be bad news for people trying to pay their mortgage, their property taxes, those hoping to avoid foreclosure. 

And just where will all these newcomers to the 'Sanctuary State of New Jersey' reside?  Why in subsidized sanctuary housing -- courtesy of COAH and its plan to build tens of thousands of new subsidized no-questions-asked units throughout New Jersey. 

This will require massive infrastructure investment by taxpayers -- and an increase in property tax collections.  To pay for it, the Democrats intend to scrap the 2-percent cap on local government spending.  Under the Democrats property taxes rose an average of 6.1 percent a year -- triple the rate of inflation.  Since the cap, property taxes have gone up an average of just 2.1 percent a year.

If the Democrats ever build a border wall, it will be to keep working taxpayers in -- not criminal illegals out.  That is the shame of it.

Why Does Phil Murphy hate average Americans?

Unable to embrace his neighbor, he embraces the world.

The sneering contempt that many in the American "elite" have for average working Americans has been extensively documented.  It comes, quite naturally from the lips of say, a Chelsea Handler, when she says that incest doesn't happen among people like her but only in places like the South and among the working class. 

Of course, this is in marked contrast to the excuses the same "elites" make for violent criminals, cop-killers, terrorists, totalitarians like Stalin, Mao, Che Guevara, Fidel Castro, and Pol Pot.  Excuses, excuses... some even make excuses for Sharia law and for its advocates -- like Women's March co-chair Linda Sarsour.

It was Linda Sarsour who called for "jihad" against the government of the United States of America.  She did so in a speech in which she praised Siraj Wahaj, a controversial New York imam who federal prosecutors alleged was a possible "co-conspirator" in the 1993 World Trade Center bombing.  You can catch her act here:

Did candidate Phil Murphy distance himself from Linda Sarsour and her organization?  No he did not.  He did not criticize her at all.

When Linda Sarsour made some horrible remarks about a Black woman, a victim of genital mutilation, and noted reformer in the Muslim world, did candidate Phil Murphy say a word about it?  No he did not.  He continues to support Sarsour, her organization, and its goals.

In contrast, candidate Phil Murphy has been quick to play holier-than-thou over a band banner and the word "bitch" used in a private conversation that was illicitly recorded.  Apparently these are worth endless commentary but calling for Islamic "holy war" against the elected government of the United States -- while we have American military men and women in the field -- is not worth candidate Phil Murphy batting an eyelash over.  Apparently, candidate Phil Murphy has no opinion on whether or not Linda Sarsour was out of line when she told a female victim of genital mutilation that she "wanted to take her vagina away."  Maybe Murphy thought that was "cute"?

Now candidate Phil Murphy is complaining because average working Americans can't understand why he would further erode their standard of living in New Jersey.  He and his allies in the establishment media have taken to calling these average working Americans names like "racist" because they don't agree with Murphy's plans to make New Jersey a "sanctuary state" for illegal aliens. 

Former Mayor Steve Lonegan explained what making New Jersey a "sanctuary state" would do to average working Americans living in New Jersey:

Lonegan quoted from a recent letter as to what the Democrats' "sanctuary state" policy would mean to the average taxpayer:

"A 'sanctuary state' will mean a huge influx of people who will need the social services safety net more than average.  The Democrat gubernatorial ticket has promised to impose a so-called 'millionaire's tax' that will chase away those who currently fund the state's social safety net.  Those who are left... the middle class who can't leave because of a job, or because they can't sell their home for what they paid for it, or because their child wants to finish school -- they will have to make up for the shortfall in higher taxes.

That won't be easy, because at 26.1% of income, the cost of living in New Jersey is, according to Bloomberg, by far the most expensive in the nation.  Meanwhile, state household income is nearly seven percent lower than it was in 2008 and has only grown by a little more than one percent since then. 

Those coming to the new 'Sanctuary State' of New Jersey will enter the workforce of the gray economy, where the minimum wage doesn't apply.  But for everyone else it does -- which will leave trade union workers, manufacturing, medical care and health workers, service industry workers, and mothers with part-time jobs all at a disadvantage when competing for a job.  It will be bad news for people trying to pay their mortgage, their property taxes, those hoping to avoid foreclosure. 

And just where will all these newcomers to the 'Sanctuary State of New Jersey' reside?  Why in subsidized sanctuary housing -- courtesy of COAH and its plan to build tens of thousands of new subsidized no-questions-asked units throughout New Jersey. 

This will require massive infrastructure investment by taxpayers -- and an increase in property tax collections.  To pay for it, the Democrats intend to scrap the 2-percent cap on local government spending.  Under the Democrats property taxes rose an average of 6.1 percent a year -- triple the rate of inflation.  Since the cap, property taxes have gone up an average of just 2.1 percent a year."

"If the Democrats are successful with their idea, they will have to build a wall to keep taxpayers in," Lonegan said.  True enough.  But it still doesn't explain what candidate Phil Murphy has against average working Americans and why he is so determined to make the lives of those living in New Jersey more difficult.

Herald should be careful not to harm Green's case

We cringed when the Herald recently ran a story about a controversial plan to drop a drug treatment facility into bucolic Green Township, Sussex County, and used these words to describe those concerned residents who formed a group to monitor the process:

"...Greenfield Action Committee -- a citizen action group formed to prevent the facility from coming to Green..."

In describing the residents in this way, the Herald is playing into the hands of an out-of-state corporate group that has used such characterizations to harness the power of the federal government to compel local governments to accept such facilities or face punitive consequences.  Fortunately, one of the citizen group's organizers clarified the group's purpose in a letter to the Herald.  It is printed in full, below:

Clarification about committee in Green

Posted: Jun. 22, 2017

Editor:

It was terrific reading the story about the Green Township Land Use Committee meeting in the Herald this morning, and thank you Katie for attending the meeting and giving our organization, the Greenfield Action Committee, a voice.

We do have a concern about one aspect of your story: You described us as a citizen action group formed to prevent the facility from coming to Green.

We're not comfortable with that characterization. We formed to ensure the conditional use variances Ambrosia seeks on Pequest Road were denied, believing suitable and appropriately designated areas already exist in the community that would be much less impacted.

We are not opposed to Ambrosia or its mission.

Jim Hohman

Greendell

And while we are discussing the Herald and its coverage of this issue, we should note that while the Herald is very vigilant regarding making anyone connected with a political campaign clearly identify who they are associated with and what position they hold, they are not so with corporate entities who have as much or even a greater impact on our community.  Individuals who are clearly associated with the addiction/mental health/rehab industry (and it clearly is an industry, just as your stockbroker if you don't believe us) are permitted to post on the Herald website without disclosing their affiliations.  This would never be allowed if it were a political campaign, so why is it allowed on something so important to not only Green Township, but to all of Sussex County?

And there is a political angle to all of this too, in the presence of Assemblywoman Holly Schepisi, an attorney representing the addiction/mental health/rehab industry giant that wants to build the drug treatment facility in this rural community.  For some reason, the Herald misses this fact and never mentions the political muscle brought to the table.  Assemblywoman Schepisi, who is only identified as an attorney in the Herald story, is quoted at length and appears to have some hostility towards the residents:  

Holly Schepisi, attorney for Hunting Bailey, LLP, and representative for Ambrosia Real Estate, said that her client did not feel that a second variance would be necessary due to the nature of the proposed facility and that fact that it would be intended for one principal use.

At the suggestion of the board, Schepisi elected to use a five-minute recess to confer with her clients, who were present.

"One aspect of this facility cannot exist without the other," Schepisi said, speaking after the meeting had reconvened. "They are part and parcel. We still strongly believe that there is no need for an additional variance, but in order to avoid dragging this process out for my client, we have decided to return to this matter at the next meeting in July."

Schepisi said that her clients had agreed to submit an application for a second variance...

Schepisi said during the meeting that several members of the community had crossed the line from concerned to aggressive throughout the course of the proceedings so far.

"Many of the residents have been great, and are here tonight because they don't know what is being proposed, and they are here to ask intelligent questions and get a better understanding of what my client does," Schepisi said at the start of the meeting and prior to any objection. "But there are other people sitting here tonight who, unfortunately have expressed vitriol against my client, against the property owners, personal attacks against members of my firm, and personal attacks against me. Some of the people sitting here tonight went so far as to urge people to call a corruption tip hotline on me to try to scare me off from doing my job. We are here to set the record straight and to explain what it is my client is trying to do."

With the greatest respect to the Assemblywoman, her client has crossed the line many, many times when it has compelled local communities -- forced them, against their will, even as they screamed "no means no" -- to accept their facilities.  The addiction/mental health/rehab industry has been guilty of this over and over again. 

There is a perverse Darwinism at work here that is called "conservative" by some, like the Koch Brothers, but is in fact just capitalism sucking a crack pipe filled with money, greed, and corruption.  One upon a time there was an America of place.  Our nation was a community of smaller communities.  Both Republicans and Democrats agreed on this.  President Franklin Delano Roosevelt's good friend Arthur Morgan wrote a book about it called, "The Small Community:  Foundation of democratic life."

Today we have a United States Supreme Court that allows corporations to use eminent domain for no better reason than to generate cash.  We have a State Supreme Court that uses COAH to destroy the rural aspect of communities and bring architectural blight to historic towns.  We have people, like the Koch Brothers, who believe that whoever has the most money should get their way and if they want to build a toxic waste dump on the village green they should be allowed to do it -- simply because they are richer and can buy more influence.  And if they don't get their way, they use federal law to cook-up some case to crush the small community that stands in their way -- just like the addiction/ mental health/rehab industry has been doing for years and years.

The addiction/mental health/rehab industry's mouthpiece, posting under the Herald article, threatened as much:

"...ultimately, the protection will be for the corporations and industry....the Town Leaders have a responsibility to the taxpayers. A long and costly battle with risk of federal penalties and fines isn't in the best interests of the taxpayers.  Historically, Ambrosia has prevailed when it encountered community resistance."

Should any community have to lay down for a threat like that? 

Maintaining the local democratic governance of the small community -- this conservatism of place -- is something that should concern not just Green Township, but all of Sussex County.  This is something, not only for the Sussex County League of Municipalities, but for the state League of Municipalities.  And not just this state -- but all states -- all small communities everywhere.  Reach out to other communities where this corporation has had its way or is threatening to have its way.  Reach out to all communities threatened by the Darwinian capitalist model used by this industry and others to have their way.  They can pick-off small communities like Green Township one by one, but banded together it becomes a much more difficult prospect.

Assemblywoman Schepisi should understand this.  In her role as a legislator, she recently conducted a public meeting on the effects of the unelected State Supreme Court's COAH rulings that mandate subsidized housing in New Jersey.  The un-democratic, politically-appointed Court has consistently pissed on local democracy, ignoring basic issues like clean drinking water for ever-expanding populations in the most densely populated state in America, while crushing the rights of a supposedly free people to determine how their communities will grow. 

We strongly, but respectfully, suggest to Assemblywoman Schepisi that she think of the small community of Green Township, and of the cause of local democracy, when engaging in negotiations with the residents there.  Maintain greater patience and calmly answer their questions and their process.  Make it work for the residents by showing on paper how it will lower their property taxes (and if it doesn't, have the corporation voluntarily pay a surcharge so that it will).  Make it so advantageous for the community that they are willing to put up with the changes to their beloved town that will most certainly come.  Convince them, do not attempt to compel them.  Remember, the only truly moral law is that derived from the consent of the governed.  All else is no more than brutal force under the guise of law.