When Property Tax Relief Means More Spending, Higher Taxes

We’ve pointed out many times how so-called state property relief actually fuels spending and increases taxes. Here’s the latest example. Governor Jon Corzine is requiring school districts to spend all state aid increases greater than 3 percent on “new or enhanced programs”. Districts are forbidden from using the extra funds to reduce property taxes, or in many cases, to mitigate property tax increases.

Local officials say those provisions mean the targeted aid will not help offset local taxes.

"It is not tax relief, and that is what people might see in this," said Robert Gratz, superintendent in Hackettstown, where aid increased 5.5 percent. "People are seeing we got 5.5 percent more, when we actually didn't."

In Montclair, superintendent Frank Alvarez said the strings on about half the new state aid his town will receive could complicate the district's efforts to win community support for the upcoming school budget.

"We are grateful for the money, but it certainly is not the 6 percent raise for Montclair that was advertised to the world," Alvarez said. "It is deceiving to the public. Our challenge will be trying to explain this to our local constituencies in order to gain their support during this budget process."

School aid, municipal aid, property rebates and credits are designed to be “deceiving to the public”. Each new “property tax relief” program in New Jersey has produced only one result – increased spending, higher state taxes and higher property taxes.