Property taxes could skyrocket in NJ — here’s why (Analysis)
It’s no secret that school funding is what drives New Jersey’s highest-in-the-nation property taxes. Assemblyman John Burzichelli, D-Gloucester, said during budget hearings on Wednesday that school funding “haunts this legislature from year to year.”
Gov. Phil Murphy continues to insist the way to provide relief is to spend more. At a news conference in Woodbridge on Monday, Murphy said the burden of funding schools should not rest solely with local taxpayers, and “the state must continue to take the necessary steps to pay our fair share and provide property tax relief.” Unfortunately, New Jersey doesn’t have the money to spend more, and local taxpayers may be forced to pay more.
Under the new school funding formula approved last year, all districts receive what is known as the “local fair share.” The aid is calculated using a complex formula that takes into account actual student enrollment as well as projected population growth. It also phases out so called “adjustment aid” many districts have been receiving for years, essentially giving some districts more money than they were entitled to.
Under the new formula, some districts will be receiving more state aid, but a third of districts will receive less. Panicked school officials testified during budget hearings about the impact of the lost aid, warning of teacher firings, school closures, and increased class sizes.
Support is increasing among lawmakers for allowing those districts to dramatically increase property taxes to make up for the loss in state aid. The legislature would have to specifically authorize such a move, because schools districts are bound by a 2 percent property tax cap. Districts where the aid cuts are deepest could see double-digit property tax increases for years.
One idea is allowing districts to ignore the 2 percent cap until their local “fair share” of aid is fully funded by the state under the new funding formula. Another idea involves a “cap bank.” If towns raise taxes less than 2 percent in a given year, they could add that to future years. In other words, if taxes go up 1 percent one year, they could go up 3 percent in subsequent years.
Old Bridge Superintendant David Cittadino was among those pushing for a lawmakers to allow bigger local tax increases. “If the goal of the fair funding formula is to put the responsibility back on taxpayers,” Cittadino said, “let our taxpayers support that.”
Taxpayers are likely to be shocked if their tax bills arrive with a huge increase after hearing Murphy and lawmakers boast of increasing overall school aid by hundreds of millions of dollars last year and another planned increase this year. Old Bridge resident Clay Barton told lawmakers on Wednesday he had made “my peace” with New Jersey’s high taxes, and was proud he has been able to afford a home in Old Bridge. But if he is hit with a massive property tax hike, he’s out of here.
“For the first time in all my years,” Barton said, “I’m seriously considering packing up and leaving New Jersey for good.”
More from New Jersey 101.5: