Editorial: Lower New Jersey Property Taxes
Originally appeared on app.com.
Opinions in this Editorial are those of the APP an do not reflect those of Patrick Parker Realty.
Good news, as the Christie administration declared???
It certainly isn’t good news to the taxpayers in many counties and towns that got slammed: Up 4.7 percent in Ocean County and 3.1 percent in Union County. Up 20 percent in Mantoloking, 14 percent in Toms River and 12 percent in Sea Bright. Up 5.1 percent in Rockaway in Morris County, up 4.6 percent in Highland Park in Middlesex and up 4.4 percent in Bedminister in Somerset County. Up 8.3 percent in Little Falls and up 6 percent in Prospect Park in Passaic County.
As far as we’re concerned, the fact property taxes rose at all is simply more bad news piled on years of bad news for New Jersey taxpayers. Yes, the average increase was far lower than the increases seen before the 2 percent cap on property tax levies was instituted in 2010. But the fact remains that New Jersey’s average annual property tax of $8,161 remains the highest in the nation — by far. In response to the Great Recession, all states cut back on spending and many instituted caps. New Jersey’s relative tax position, as we’ve documented ad nauseum, has not improved relative to other states.
We have long argued that simply slowing the rate of increase isn’t enough — not when poll after poll of New Jersey residents identifies the onerous property tax burden as the state’s No. 1 problem and the Christie administration cites it over and again as one of the leading reasons people are moving out of state.
And slowing the rate of increase certainly isn’t enough when possible solutions to the problem, or at least responses that can ease the burden, not only haven’t been initiated, but not even seriously considered since Christie took office.
It should emphasized once again that the relatively modest increases touted by the Christie administration over the past several years are grossly misleading because they do not take the reduction or outright elimination of property tax rebates and tax credits into account. It is difficult to get an exact handle on the impact the loss of those rebates and credits has had on homeowners because the Department of Community Affairs website no longer includes the average Homestead rebate calculation in its annual tax tables. It was removed because the comparisons to the previous administration were unflattering.
An analysis last year by the Asbury Park Press using DCA website data figures — before they were removed — showed net-average property taxes rose 19 percent under Christie during his first three years in office. Under Democratic predecessor Jon Corzine, there was an 11 percent increase during his first three years in office from 2006-2008 thanks to rebate programs. (A lawsuit has been filed to have the DCA include rebate and tax credit information again.)
In last year’s State of the State address, Christie spoke about “a new property tax relief initiative” and his intention to announce “changes to our tax system” when he delivered his budget to the Legislature. It never happened. And given his focus on higher office these days, we aren’t expecting much in the months ahead.
The Republicans alone aren’t to blame, however. Early last year, both Assembly Speaker Vincent Prieto and Assembly Majority Leader Lou Greenwald promised they would create a task force to study ways to provide property tax relief.
“I don’t know all the solutions,” Prieto said. “I’ll look at things other states are doing, and we’ve got to see how we can put that together with what we’ve been doing.” Greenwald promised to “attack New Jersey’s property tax crisis once and for all.”
Having heard nothing about the task force since, we contacted the Assembly Democrats Office Friday in search of an update. No response by our press time.
We are tired of politicians simply throwing up their hands, contending that slowing the rate of the property tax increase is good enough, or that, somehow, because New Jersey has a high cost of living and is an affluent state, that high property taxes are to be expected.
Even taking those considerations into account, New Jersey’s property taxes are out of whack with the rest of the country. Slice it any way you like, and they are the highest. Calculated as a percentage of income, they are No. 1. Calculated as a percentage of property value, they are No. 1. In absolute dollar terms, they are No. 1.
RESOURCE: NEW JERSEY PROPERTY TAX INFORMATION
It is a problem that politicians on both sides of the aisle have lacked the resolve and courage to deal with for years. For those who preceded the current administration, it can at least be said that they were concerned enough to at least study possible solutions, forming tax study groups, establishing property tax conventions and analyzing the possibility of revenue-neutral solutions to reducing property taxes by altering income tax rates and brackets and making additional goods and services subject to the sales tax.
A special session of the Legislature called to study solutions to the property tax problem developed several recommendations in 2006, but few were implemented. It’s a disgrace that, since then, there has been no serious movement on anything other than a spending cap to address the state’s most pressing problem.
There is only one way to get your elected officials to act: Start screaming, and don’t stop until they do something — or until you vote them out of office.
This is general information designed to help you put these valuable deductions on your radar. Patrick Parker Realty Agents and Realtors are not certified accountants. Please be sure to check with your tax adviser to see if you qualify for a particular credit or deduction.
The Patrick Parker Realty Tax Season Blog Series will cover many topics as they relate to real estate and increasing your income tax refund. Such topics will include Home Ownership Tax Breaks, Hidden Tax Deductions, Deductions on Mortgage Interest, Reporting on the Sale of Your Home, Home Purchase Tax Credits and more. In addition, our Blog Series will explore Tax Incentives as they relate to major transitions and lifestyles; Marriage, Birth, Divorce, Death of Spouse, Health Insurance, Caretaking of Dependents, Business Owners, Commuters and more.
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For more information about paying taxes on the sale or purchase of your home or any other questions you have about this article please speak with your tax professional or visit www.irs.gov.