New Jersey Property Tax Growth Biggest in Three Years
Originally appeared on app.com
New Jersey property taxes increased at their fastest rate in three years in 2014.
New Jersey’s average residential property tax bill, already the highest in the nation, jumped by 2.2 percent, to $8,161, according to annual property tax data compiled and released by the state Department of Community Affairs. The average tab had grown 1.3 percent in 2013, 1.6 percent in 2012 and 2.4 percent in 2011.
Factor in the impact of a delay in property tax credits, which weren’t paid in 2014, and the increase averaged 8.6 percent, or $646.
Some of the sharpest tax increases occurred in Shore towns devastated from superstorm Sandy, including 20 percent in Mantoloking, 14 percent in Toms River and 12 percent in Sea Bright. The increases occurred despite federally funded programs that make forgivable loans and aid available to offset the impact of property value declines — losses that force a greater tax burden onto surviving properties.
Sandy caused Sea Bright’s budget to balloon and made the town’s property tax burden seem larger than it actually is, said Mayor Dina Long.
The Sandy-associated debts are reimburseable through the Federal Emergency Management Agency and the town continues to receive grants from the federal and state governments — meaning that property owners won’t actually be on the hook for the vast majority of those extraordinary costs. An average Sea Bright tax bill grew by about 3 percent, in practical purposes, Long said.
Property taxes rose at a sharply higher 4.6 percent rate in Ocean County and just 1.7 percent in Monmouth County.
Among the other towns in Monmouth and Ocean counties that saw significantly higher increases were:
- Seaside Heights: 6.8 percent
- Point Pleasant Beach: 6.7 percent
- Tinton Falls: 5.7 percent
Some towns saw property tax decreases, including:
- Asbury Park: -6.5 percent
- Farmingdale: -6.5 percent
- Deal: -5.4 percent
- Matawan: -2.6 percent
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Mayor Gerald Turning chalked up the nearly 6-point jump in Tinton Falls to rising “health care costs and pension contributions.”
While overall, property taxes haven’t been decreasing, their growth rates had slowed each of the previous three years after a 2 percent cap on tax levy growth was imposed in 2010. The levy cap has exceptions for some categories of spending and allows governments that increase taxes less than 2 percent to bank the difference for future use.
MORE: Why the 2% tax cap isn’t 2%
Jerry Cantrell, president of the conservative think tank Common Sense Institute of New Jersey, said people leave New Jersey because of their property tax bill and that exemptions to the 2 percent cap and last year’s suspension of the tax credit program make things even harder.
“It’s not just people with bucket loads of money, it’s people who are retiring from their state jobs, etc., that look around,” Cantrell said. “Some of it is historical. Why not move to a warmer climate, be near kids and family? But it really is becoming noncompetitive. When you put everything on top of the average person, they just can’t afford to stay.”
Gov. Chris Christie’s administration delayed the payment of property tax credits last spring due to a state budget shortfall. Those credits had averaged a bit over $470 in 2012 and 2013, but the payment that was supposed to have been made last year was pushed off to May 2015.
Mike Proto, spokesman for the state chapter of Americans for Prosperity, said New Jersey property taxes will remain high unless the school funding formula is changed to shift money away from cities and toward the suburbs.
“While we’re glad to see a rate of increase that’s still low compared to what we’d seen over the past decade and a half, we would much rather see property taxes coming down. They’re still far too high. They’re a major reason why people and businesses continue to leave New Jersey,” Proto said.
Property owners statewide were billed a combined $27.1 billion for property taxes in 2014, which was $610 million more than they paid a year earlier. The total levy had grown by $450 million in 2013 and $407 million in 2012.
School tax levies rose $309 million, or 2.2 percent, the most since 2010. Municipal tax levies increased $206 million, or 2.6 percent, the most since 2011. And county tax levies climbed $95 million, 2 percent, the most since 2009.
The DCA data also showed the average residential property value in the state increased in 2014 after declining each of the previous two years. The average value was $295,869, up 1 percent from one year earlier though still below the peak of $299,014 recorded in 2011.
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