New Jersey Spends $10 Billion In Property Tax Relief - Unfairly

Lynne Strickland, Executive Director of the Garden State Coalition of Schools has quoted in this past Thursday’s Star-Ledger as saying:

"Property taxpayers are overwhelmed, while state aid has not been increased for five years."

That is an interesting comment that needs to be challenged. State Income tax revenue has grown from $7.035 billion in fiscal year 2000-2001 to $10 billion in fiscal year 2005-2006. That’s a 30% increase in five years and it has been distributed to municipalities in what is called school aid.

Governor Corzine’s Budget and Reengineering Government Transition Policy Group released a report this past Friday that said:

School aid is a nearly $10 billion item, growing significantly every year. The budget problem cannot be solved until the State deals with controlling education costs.

Strickland should have said school aid has increased by at least 30 % to the 31 Abbott School districts over the past five years, but state aid for schools in the rest of the state has been steadily decreasing. Parity in per student spending has long since been achieved in New Jersey’s “needy schools”, with per pupil spending 30-35% greater than a non-Abbott School counterpart in the same county.

To be more precise, property tax relief (school aid) has increased by 30% in the past five years, but only a select group has benefited. New Jersey’s Constitution mandates that 100 percent of the revenue collected from New Jersey’s income tax must be deposited in the Property Tax Relief Fund to be used solely for the purpose of reducing or offsetting property taxes. Specifically, income tax revenue must be distributed to reduce the school tax portion of property tax bills.

New Jersey Constitution:

No tax shall be levied on personal incomes of individuals, estates and trusts of this State unless the entire net receipts there from shall be received into the treasury, placed in a perpetual fund and be annually appropriated, pursuant to formulas established from time to time by the Legislature, to the several counties, municipalities and school districts of this State exclusively for the purpose of reducing or offsetting property taxes.

To address the property tax crisis the state needs to distribute revenue from the Property Tax Relief Fund (state income taxes) more equitably and must curb escalating education costs in Abbott School Districts to ease the state’s budget crisis. You can compare property tax information and state property tax relief for your town against others here. It’s a real eye opener.

As Governor Corzine looks to add a surcharge to the income tax, what he really will be doing is taxing your income to provide more property tax relief to those already getting the lion’s share. Hard pressed property taxpayers don’t need rebates; they need an equitable distribution of funds from the state’s Property Tax Relief Fund.

Contact your state representatives and tell them you oppose an income tax surcharge or income tax rate increase. Tell them the state is not distributing property tax relief fairly and it’s time for this practice to stop. Find the names and contact information for your representatives in the state’s Assembly and Senate here.