Newspaper: More towns exceed 2 percent property tax limit

A growing number of New Jersey towns are failing to stay within the 2 percent cap on property tax increases that was passed into law five years ago.

An analysis by The Record newspaper found that 60 percent of the state's 565 municipalities exceeded the tax cap last year. That's 334 municipalities, which is the highest that figure has been since the tax changes were passed in 2011 by the Legislature and signed into law by Gov. Chris Christie.

Last year marked the third year in a row that the number of towns surpassing the cap grew.

Towns are using exemptions written into the 2011 bipartisan deal, which allow for increases beyond the cap limit for certain expenses.

The newspaper's analysis found little indication that towns are reverting to the large increases that were common before the cap was set, when levies often rose 5 percent or more. But the total amount of tax levied to pay for town and county services rose by about 3 percent.

"What you're seeing is the growing effect of ever-increasing pressures on local budgets, but the cap is still keeping increases somewhat in check, and nowhere near the increases we were seeing before and during the recession," said Marc Pfeiffer, assistant director of the Bloustein Local Government Research Center at Rutgers University. "The upward pressure, however, is increasing."

In Bergen County, 21 of 70 municipalities managed to stay within last year's cap. Four out of Passaic County's 16 municipalities were under the limit.

Local government officials say the need to use the cap exemptions will be necessary as long as costs continue to rise.

"Absent favorable events elsewhere, more towns will be forced to use the exceptions and go over the 2 percent cap," said Jon Moran, senior legislative analyst of the New Jersey League of Municipalities.

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