New Jersey's Property Tax Reform Process A Taxing Situation

Most homeowners love complaining about their property tax bills almost as much as they despise paying them.

The issue is always on the minds of New Jersey's homeowners, and has been for some time. New Jersey has been studying property tax reform for three decades, since the establishment of the Tax Policy Committee under former Governor William T. Cahill in 1972. The idea of a constitutional convention to reform property taxes was first raised in 2000 by then Sen. William E. Schluter.

New Jerseyans pay the highest property taxes in the nation. According to Cy Thannikary, the chairman of the Citizens for Property Tax Reform, a coalition of 57 different organizations representing over 500,000 homeowners, 47 percent of all tax revenue paid by the average homeowner comes from state and local property taxes, compared to 30 percent for other state residents. In the last 10 years, the average property tax increased by a whopping 52 percent, he says.

According to George Hawkins, executive director of New Jersey Future, a tax advocacy group, there are two fundamental reasons why taxes in New Jersey are so high. "First," says Hawkins, "New Jersey relies more than most states on local property taxes to pay local service costs. In most states, more of the local service costs are shared across a county, or come from the state itself. In New Jersey the preponderance of those expenses is covered by the local property tax, so it becomes disproportionately high compared to other taxes because it covers a larger degree of expense."

"Another reason contributing to higher local property taxes is that New Jersey has a lot of local governments that need to be covered for expenses—566 municipalities, to be exact—and there are even more school boards than municipalities. All of those have their overhead costs, institutional costs, and administrative costs, which all add up. There certainly is the thought that if more of these expenses were shared among the municipalities, you could save on the expense side. On the tax side, New Jersey relies more on the property tax to cover those expenses."

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