Manzo's Property Tax Relief Plan

Property taxes in New Jersey have increased 29% over the past four years according to a report in the Star-Ledger. So how do you solve the problem of ever increasing property taxes? The answer according to Hudson County Assemblyman Louis Manzo (D) is to raise the state’s income tax and eliminate the property tax rebate.

Based on a plan developed by the New Jersey Coalition for Property Tax Reform and refined by Manzo, the state would impose a 25 percent surtax on state income taxes and eliminate property tax rebates to generate a combined $3.3 billion. Manzo would use these funds to “to cut school property tax bills in half.”

Call us skeptical. Last year New Jersey’s municipalities collected $19.5 billion in property taxes and will certainly collect more in 2006. Property taxes pay 60% of the total coast of public school education in the state or about $12 billion. Obviously half of $12 billion is not $3.3 billion.

To mitigate the need for higher property taxes and to bring about parity in per student spending throughout the state, New Jersey introduced the income tax in 1975. New Jersey’s Constitution stipulates revenue from the income tax can only be used to reduce the public school portion of property tax bills.

This year New Jersey will collect a minimum of $9.5 billion in revenue from the state’s income tax and all of it will be distributed to municipalities for the sole purpose of reducing property tax bills. However, property tax relief is not allocated in a fair and equitable manner.

Homeowners living in New Jersey’s urban centers receive huge property tax reductions, while those living in rural and suburban towns receive little in the way of relief. Families with identical incomes and home values receive wildly different property tax relief from the state under the present system. This inequality has led to the current property tax crisis in New Jersey.

Parity in per student spending has long since been achieved and then exceeded in New Jersey’s “needy schools”. In every case an Abbott School spends far more per pupil than its non-Abbott School counterpart. For example, Haddonfield’s (Camden County) average cost per student is $10,658 while Camden (Camden County) spends an average of $15,091. That’s a 42% difference in spending per student. State property tax relief for a Camden homeowner is $10,654, a Haddonfield homeowner benefits from a $385 reduction.

This inequality is further exacerbated with the allocation of state school construction funding. Abbott School construction is paid 100% by the state, while rural and suburban towns receive little or no financial assistance. Is it any wonder a Star-Ledger analysis found school contraction costs were an average 45 percent higher for schools built with state funds versus those built with local funding?

Assemblyman Louis Manzo pays $5,887 in property taxes on his residence in Jersey City, $20 more than the average $5,867 property tax bill in the state. Manzo has his school tax bill reduced by $11,057 out of the state’s income tax fund – nearly twice the property tax bill he pays.

The average spending per student in Jersey City is $14,420. Compare this to per student spending in Millburn of $11,820 and state property tax relief of $472 per homeowner. No surprise a recent Millburn school bond referendum was soundly defeated by voters, Millburn’s property taxes are already among the highest in the state.

Manzo would like to increase the income tax to provide homeowners and renters with an average of $1,500 in school tax relief. We’ve seen how well the income tax has worked to reduce school taxes. It hasn’t. New Jersey has the highest property taxes in the nation. Now Manzo and his pals are working toward making the state’s income tax the highest in the country.

Manzo is offering more of the same - inequitable school spending, inequitable property tax relief and higher taxes. No thanks.