NJ property taxes up $700M in 2016 — See how your bill compares
Property taxes increased by more than $700 million across New Jersey in 2016, the most in six years, according to a New Jersey 101.5 compilation of tax data.
That added $196 to the average residential property tax bill, a 2.35 percent jump to $8,549. That’s the same percentage increase as in 2015, which was the most since 2011.
The tax levy increased by 2.54 percent statewide, or nearly $703 million. The levy last rose by that percentage in 2011, and the last time it grew by that many dollars or more was in 2010.
The levy can increase by more than Gov. Chris Christie's signature 2 percent cap because of exceptions for pensions, health benefits, debt, construction and emergencies. Also, governments that are under the cap one year can "bank" that increase to use in any of the next three years.
Christie spokesman Brian Murray said the governor didn’t want the exemptions. Murray said rising property values largely triggered the slight tax increase and that annual increases in property taxes have averaged 2.04 percent since 2010.
“The annual increase would have been lower had the Legislature not incorporated exceptions to the 2 percent caps, exemptions the governor advocated against,” Murray said. “But more importantly, the rate of increase is far below the astounding 7 percent-per-year tax growth New Jersey averaged during the decade preceding the governor's arrival in office.”
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The rise in the average tax bill was smaller than the rise in the levy because the average residential assessment increased to $301,753, an increase of 1.6 percent from the $296,884 of 2015.
“While we need to continue tax reform in New Jersey, imagine where the Garden State's property taxes would be if not for Gov. Christie's reforms and if annual average increases continued at a rate of 7 percent for the past seven years?” Murray said.
Is slow growth the best New Jersey can expect? Lawmakers insisted that’s not the case.
“That’s not acceptable,” said Assembly Speaker Vincent Prieto, D-Hudson. “Our goal should be to be cutting property taxes, not just curtail the rate of growth. It should be: How do we get property tax relief to an area that we’re No. 1 in the nation but we don’t want to be No. 1.”
“It better not be the best we can do,” said Assemblyman Ronald Dancer, R-Ocean. “It’s the most oppressive and regressive tax in the United States, and we cannot settle for that mindset. We must lower property taxes.”
“Until you take it out of the hands of the legislators and you put it in the hands of the people through a constitutional convention to lower property taxes, I don’t see anything getting done,” Dancer said. “I’m hopeful that something could get done, but history has not proved it.”
Official property tax statistics for 2016 haven’t yet been published by the Department of Community Affairs. This analysis relies on abstracts of ratables compiled for each of New Jersey’s 21 counties.
All told in 2016, $28.35 billion in property taxes were levied by county, municipal and school governments.
That levy doesn’t include the property taxes collected by 270 other "special taxing districts," such as fire districts, excluded from the calculation because they are not necessarily assessed on all properties in a municipality. Those special districts levied almost $298 million last year.
Top 10 property tax increases in 2016
|Municipality||2016 avg||2015 avg||Change|
|Lower Alloways Creek||$2,012||$1,863||8.00%|
School taxes accounted for a disproportionate amount of the increase — $377 million of the $703 million, or 54 percent. In all, school taxes account for 52 percent of the total property tax tab.
“You’re not ever going to affect property tax relief in this state or lower property taxes unless you at least address school funding,” said Assembly Minority Leader Jon Bramnick, D-Union.
“We need to change the school funding formula because that will drive down property taxes and create educational opportunity in every single ZIP code in the state of New Jersey,” said Senate Minority Leader Thomas Kean Jr., R-Union.
Legislative hearings on school funding are underway. A special Senate committee holds its first meeting Friday in Gloucester County. Senate President Stephen Sweeney, D-Gloucester, wants to modify the funding formula approved in 2008 and gradually return to actually following it.
“This is one of the most important issues when it comes to property taxes,” Sweeney said. “People complain about property taxes, and rightfully so, but you know what people really complain about? The unfairness of the funding system now and that every single year, it gets further out of whack.”
Municipal taxes account for 30 percent of property taxes and county taxes for 18 percent.
Prieto said the Transportation Trust Fund will help address property taxes over the next eight years because it roughly doubles the local aid to $400 million a year, plus has economic benefits through tax cuts and road and rail improvements.
“To invest in infrastructure, to get additional money to people to try to spur this economy and have the proper revenues in the state of New Jersey to be able to do the things we need to do,” Prieto said.
The Assembly Education Committee is also holding its own hearings on school funding. Prieto said 76 percent of school districts are receiving less state aid than they did in 2010. That was the final budget adopted under then-Gov. Jon Corzine and relied on extra federal aid.
“That’s a problem because over $1 billion were taken out, and that has been year after year. So that in itself has not helped,” Prieto said. “We haven’t fully funded the formula, so the slack is picked up by the property taxpayers.”
In 147 of New Jersey’s 565 municipalities, more than one-fourth, the average residential property tax bill now exceeds $10,000. That’s nine more than in 2015.
Top 10 property tax decreases in 2016
|Municipality||2016 avg||2015 avg||Change|
|Cape May City||$5,327||$5,510||-3.30%|
Assembly Majority Leader Louis Greenwald, D-Camden, said “true tax reform” would adjust the tax system away from real-estate taxes to one based on a person’s ability to pay.
“That is really at the crux of what you need to do. You need to look at a system that is fundamentally broken, that over-relies on property taxes to fund all local government, and it’s the only state in the country that does that,” Greenwald said.
He expects action on the issue in 2018 – after the next gubernatorial election. He said candidates such as Democrat Phil Murphy and Republican Jack Ciattarelli, an assemblyman, have talked about the tax system already. Kean said he expects all the candidates to talk more about it soon.
“I don’t think in the next year it’s something that will happen with this governor,” Greenwald said. “I think he’s made it pretty clear. But I think with the next administration, I think it will be at the forefront of that administration’s policies.”
Assemblyman John Wisniewski, D-Middlesex, is among the candidates to be the next governor. He said shared services and consolidation of local government is one key to lowering property taxes.
“When we look at New Jersey and see that we have 1,300 units of local government – think about it, an astounding number of entities that have the ability to impose some type of tax or fee – we see part of the reason why government is so expensive,” Wisniewski said. “A lot of it is duplicative. A lot of it is overlapping. We can do better.”
The property tax data cited above doesn’t factor in the impact of property tax credits.
The state spent around $330 million on those credits, which were applied to the May 2016 tax bills. Around 442,000 senior and disabled homeowners got credits averaging $515, while around 252,500 non-senior homeowners got credits averaging around $400.