"Knowledge will forever govern ignorance

 and a people who mean to be their own governors

 must arm themselves with the power which knowledge gives."

Wednesday, July 12, 2006

Who’s Creating Myths?

Fred Snowflack, editorial page editor of the Daily Record, in his blog post of July 9, More on the Budget:

You have to laugh at some of the posters who say things like none of the property tax relief will go to Morris County. They either subscrbe to, or have created, the myth about rich and affluent Morris County being mistreated by the state.

If there is property tax relief in the form of higher rebates, obviously, every homeowner will benefit. It makes no difference where they live.

And contrary to what some have said, more state aid to schools and towns definitely is property tax relief because it reduces what has to be raised locally. If local school boards and town councils do not use that money for property tax relief, is that the state's concern? Or is it the responsibility of the local voters to "dis-elect" them?
We don’t know if Snowflack is trying to bait people with baloney or just is totally unaware of the facts. Either way, he does a disservice to his readers and makes you wonder about his motives.

Snowflack doesn’t define the terms “rich and affluent”, as those terms generally aren’t when thrown around in discussions about government spending and taxes. Do they refer to families earning more than $70,000 or $100,000 per year, or is there some other dollar amount that places people in the “rich and affluent” categories? Who knows?

Here’s what we do know. More state aid to municipalities would be considered more property tax relief, but as has been widely reported, state aid has been flat-funded for the past four years (except for the 31*) and will be again in this year’s budget.

However, during those same five years, income tax revenue (the Property Tax Relief Fund) has grown from $7,195,390,000 per year in 2003 to $11.615,000,000 in Corzine’s 2007 budget. That’s billions more dollars in the Property Tax Relief Fund and a zero dollar increase to nearly every one of the state’s 566 municipalities, with the exception of the 31*. People with the same income, will receive wildly different amounts in property tax relief depending upon where they live.

We also know that as of 2003, New Jersey's median family income was $70,263 and the median income for a household in Morris County was $79,977. We know property tax rebates will not increase this year as promised. Taxpayers with incomes of $70,000 or more will not receive a rebate (previous cut off was $200,000) and with the exception of senior citizens and the disabled, all eligible homeowners will have their rebate cut by $100. So it makes no difference where you live, but you can bet that a small percentage of the $1.2 billion in rebate checks will find a way to Morris County.

We know municipal aid has been flat-funded for five years* and that the state’s Property Tax Relief Fund has increased by billions in the past 5 years. We also know who paid for most of it. New Jersey households reporting over $100,000 in income account for 80 percent of the state’s income tax revenue and 42 percent of state income taxes are paid by 1 percent of filers.

Since 2004, $7 billion in additional income taxes have been spent on property relief, where’d it go? This might provide a clue. The 31 “needy” municipalities spend 30 percent more per student as compared to the rest in the state. The 31* were demanding $500 million more in property tax relief this year.

Average per-pupil spending in New Jersey districts is $11,056. Abbott districts average $14,287, led by Asbury Park's $18,893.
Here’s what state attorney general, Zulima Farber had to say:

New Jersey's 31 neediest school districts want too much money, and the state can no longer afford their increasingly high demands, the state attorney general told New Jersey's Supreme Court yesterday.

"We have gotten to a point where the supplemental funding requests of some districts are truly shocking."
Here’s what New Jersey Department of Education Commissioner Lucille Davy had to say:

“I'm concerned that we're spending $18,000 a kid in Asbury Park, for example, and their results are near the bottom in almost any measure”. "We need to figure out why we are not getting the outcomes," she said. "It's clearly not a matter of resources."

The criteria set for Abbotts was that they be funded to achieve parity with the state's wealthiest districts. A brief filed by acting Education Commissioner Lucille Davy shows the Abbotts are already getting $500 million in aid above the parity level.
Here’s how Snowflack’s newspaper described the situation in the fall of 2005:

Property taxes in New Jersey are bad. In Morris County, they're even worse.

It's not just that wealthy districts get less aid, it's that often -- as in the current state budget -- no increase is given at all, noted Edwina M. Lee, NJSBA executive director. "Another year of flat funding makes it extremely difficult for our districts to maintain their existing programs," she said.
As for whether people living in a Morris County municipality, or similar community in New Jersey, are being treated fairly or mistreated by state government depends upon your definition of the terms. If fair treatment means paying more income taxes every year and seeing no additional property tax relief flow back into your community, than of course it’s completely fair. If fair means “needy” cities wind up spending more per student than “wealthier” towns, then of course the state government is being fair and providing equal treatment. If fair means two people with the same income don’t benefit similarly from state aid, then yea, that’s fair. But, those who base their opinions on common sense and facts may see things differently.

We have to laugh at some people who actually believe the myth that Fred Snowflack has a clue.

* Thirty-one of the state’s 566 municipalities are designated as “Abbott” for the purposes of “property tax relief” related to education aid and “needy” for the purposes of “property tax relief” related to all other municipal aid. The 31 municipalities designated as “Abbott” and “needy” were not subjected to the zero growth in “property tax relief” until the 2007 budget.

Update: Factcheck Lady pointed out his name is spelled SnowFlack, not SnowFlake. Since corrected.


At 2:00 PM, Blogger Carl Bergmanson said...

All excellent points. Two quibbles:

1. 566 Munis in NJ (There was a merger - quite some time ago now)

2. The last rebate info I saw was that they were reducing, not eliminating, the rebate for those with incomes over $70,000.

The initial rebate system was fair, even if it was inefficient, your rebate was based on your property tax burden, and there was no means testing.

The scam that it has devolved into now is just another example of why the legislature and the governor (regardless of party) can be counted on to always do the wrong thing. This is why any meaningful change has to come through the constitution, otherwise, the governor and the legislature will just steal the nmoney back.

Of course, they'll still try to steal the money back anyway, it just might be a little harder.


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