New Jersey property taxes are a big monster in local communities that is preying on homeowners. Local governments and schools in New Jersey collected $23 billion in taxes last year from property owners. New Jersey’s 2008 median real estate tax bill was $6,320 (as estimated by the 2008 American Community Survey).
Why are they so high? What is going on in New Jersey? And how do average people buy a home and pay such outrageous taxes? Are crazy taxes preventing many people from becomng homeowners?
In New Jersey, property owners pay most of the costs for local services. That includes education. And it gives most towns just one main source of revenue - the property tax.
School funding is at the crux of the dilemma. Local school funding is the largest expense item on the typical local property tax bill in New Jersey. The reliance on local property taxes to pay for local school funding causes a financial disincentive for towns to zone and build a mix of family housing.
Other states address their funding for education in ways that are more cost effective and have a smaller impact on the creation of housing. Pennsylvania has nearly five times as many municipalities as New Jersey (2,565 vs. 566) but has fewer school districts. The average Pennsylvania school district is shared among five municipalities, while New Jersey does not even manage a 1-to-1 ratio of municipalities to school districts. Maryland, where schools are administered at the county level, has a population nearly two-thirds the size of New Jersey’s yet has fewer than 40 public school systems. In both Maryland and Pennsylvania, the median property tax bill is less than half what it is in New Jersey. Is there a correlation? I think so.
Imagine the administrative costs involved in running so many school systems. School administrators are paid very respectable salaries. And think of the big pensions that must also be funded and paid.
New Jersey property taxes are so high that even a 10% cut would mean a minimal savings for property owners. Shifting that 10% somewhere else would save property owners $1.2 billion. That would cut the average property tax bill by a meager $370. That’s peanuts.
Without some change in school administration, much needed tax cuts will never see the light.
So, New Jerseyites, we’re no doubt stuck. It’s either pay or get out of town – or out of state.
With the drop in home values, many homeowners are fighting their tax bills. It is extremely unfair and one-sided when the taxes went up and up and up when housing got hot, yet we get zilch relief when the market tanks.
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{ 3 comments… read them below or add one }
Me and 2 neighbors did an appeal to have our taxes reduced in Essex county. Took some time and effort but it did work. Wasn’t as much of a cut as we wanted, but we’re winners.
I like your blog title. i’m paying both arms, both legs, both cats, three dogs & my son’s college tuition in NJ taxes. i’m appealing the taxes since my home is worth much less, but as soon as I can sell, I’m outta NJ. That’s the real answer.
Taxes are so high because New Jersey has a lot of crap going on. More than just school admins being paid big salaries and big pensions for doing very little. Hate this state. It should be embarasing to any state when people must leave their homes and move out of the state when they retire because they can’t afford the property taxes. Crazy and irresponsible management by the state.