New Jersey Property Tax Reform
Let’s say I live in West Orange, have an income of $100,000 and have a retired neighbor making $50,000. My home and my neighbor’s have the same property tax valuation. Our town receives $1,078 per homeowner in property tax relief from the state, producing a property tax bill of $10,000 for both of us. The average cost per student in West Orange is $10,980.
My retired neighbor pays $875 in state income taxes for New Jersey’s “property tax relief fund” and I pay $5,250 into the fund. My neighbor is eligible for a senior citizen property tax rebate of $1,200. I am eligible for a rebate of $250.
My neighbor pays a net total tax of $9,675 and I pay a total of $15,000. I’m paying about 55 percent more for the two taxes than my neighbor.
My neighbor has a friend living in Newark who is also retired with an income of $50,000. Newark receives $23,737 per homeowner in property tax relief from the state, producing a property tax bill of $3,200 for my neighbor’s friend.
My neighbor’s friend pays $875 in state income taxes for the “property tax relief fund” and receives a senior citizen property tax rebate of $1,200. The friend’s net total tax is $2,285.
My neighbor pays 423 percent more in taxes than his friend and I pay 656 percent more than the friend in Newark.
The average cost per student in Newark is $15,796. Newark's per capita cost for local government is $5,197 and for West Orange it's $3,338. School taxes in Newark have not been increased since 1998 and as Newark’s mayor Sharpe James bragged, the city’s property tax rate is the lowest since Newark adopted its present form of mayor/council government in 1954.
So to recap, Newark spends 44 percent more per student and 56 percent more per person for all local government services than West Orange. I am paying 55 percent more in taxes than my neighbor and 656 percent more than the friend in Newark. My neighbor is paying 423 percent more than the friend. I am paying 15 percent of my income for property taxes and property tax relief. My neighbor is paying 19 percent of his income and the friend is paying almost 5 percent of his income for the two taxes.
Now along come the property tax reformers claiming I’m not paying ”my fair share” in taxes. To reduce property taxes, income taxes must be increased and my town of West Orange should consolidate schools and services with other Essex County municipalities to save money.
Of course you never hear exactly how much more in total income and property taxes a “rich” person like me should be paying in order to achieve the distinction of paying my “fair share”. Perhaps the reformers can show us the new “fair share” income tax rate table.
You also never hear how consolidating schools and services such as police will save money. If two or more towns merge, will there be a need for fewer schools, classrooms or teachers? Yes, if you’re willing to increase the number of students per classroom, but school consolidation isn’t necessary to increase the number of students per classroom.
Does school consolidation reduce the number of text books and other supplies needed per student? How about the number of school administrators and support personnel per student, would that change with consolidation? So where exactly are the “savings” to come from – the elimination of a school superintendent or two from the consolidated towns?
The same with merging police departments, how are the savings achieved? Fewer police per resident, larger patrol areas per officer? Consolation isn’t necessary to put fewer police to work in a community.
Perhaps there are some really big savings we’re missing with the consolidation idea and the reformers will be able to give us the actual details using West Orange as an example. With which municipality or municipalities would West Orange merge? What would be the total savings by municipality and what would each homeowner’s property tax bill be, before and after consolidation?
Perhaps the reformers can also explain why Newark and similar municipalities with far higher costs per capita for the delivery of local government services are being left out of the cost cutting initiatives?
Oh, who cares, right? It’s only your money and goodness knows, politicians have proven they can be trusted to spend it wisely and do what’s best for “the common good.” Besides, why not do away with property taxes completely? Just triple the state income tax rates and ta-da, 100% property tax relief.