From the Asbury Park Press:
We’ll know real property tax reform when we see it. We’ve been closely following the Legislature’s special session. And we haven’t seen it yet. But we’ll know it when we see it, because it will meet five tests.
First, real property tax reform will reduce property taxes as a share of overall public revenue. New Jersey’s heavy reliance on property taxes to fund governmental programs and services needs to be reduced from the current 46 percent, as a share of total tax revenue, to near the national average of 30 percent.
Second, real reform will eliminate inequities in the current system of raising revenues, especially as those inequities affect low- and moderate-income residents. Households with incomes in the lowest 20 percent pay 9.2 percent of their earnings in property taxes, while the wealthiest 20 percent pay 3.6 percent of their income through this assessment. An equitable system would not ask those with the least to shoulder a disproportionate share of the burden.
Third, real property tax reform would provide relief from the property tax burden on primary residences, whether rented or owned. It would reduce the New Jersey per capita property tax burden, which amounted to $1,887 in 2002, closer to the national average of $979. In that year, New Jersey property taxes equaled 5 percent, as a percentage of personal income — almost two points above the national average of 3.2 percent.
Fourth, it would provide alternatives that lessen the dependence of school districts and local government on property taxes.
And fifth, real property tax reform would provide the means to ensure that reductions in property taxes would be sustained over time. This can occur only if the governor and the Legislature agree to address the principal drivers of local government spending.