New Jersey Real Estate Report

From the Philly Inquirer:

Christie to propose cap on property-tax hikes

Gov. Christie will propose a constitutional amendment to cap property-tax increases at 2.5 percent per year in his budget speech tomorrow, hoping to hold down the levies that have been a long-standing source of frustration across the state.

He also plans to revive a controversial tax plan to raise money for hospitals; cut aid to towns, schools, and colleges; and reshape the state’s property-tax rebate program as credits on homeowners’ bills - instead of checks in the mail - according to three officials briefed yesterday by the Christie administration. The credits would not be applied until April, May, or June 2011.

That means homeowners would not receive checks in 2010, though they still would get tax relief in the coming fiscal year. The rebates are typically mailed in the summer and fall to help offset the state’s high property taxes, which average $7,300.

Delaying the payments until the fiscal year’s fourth quarter would give Christie time to convert the checks into credits and also buy some time while the state’s financial picture became more clear. Under the governor’s plan, the credits would not be paid until after nearly a full year of tax collections and after he has proposed his next budget.

Those who received rebate checks last year - senior citizens earning less than $150,000 and other homeowners making $75,000 or less - still would be eligible to get a credit at the same level, according to the officials, who spoke on the condition of anonymity because their briefing was meant to be confidential.
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The 2.5 percent property-tax cap would replace the existing 4 percent limit. Christie also will call for eliminating several exceptions that let schools and municipalities often exceed the 4 percent maximum.

According to two sources, Christie has considered imposing a similar 2.5 percent cap on increases in state operations.

The tougher property-tax limit would put more pressure on mayors and school boards to keep local spending in check even as they lost state aid. Christie has argued for weeks that local leaders need to do their part to make the state more affordable, and he has pledged to offer “tools,” such as changes to the rules governing labor negotiations, to give them more power to control costs.

“All levels of government have to impose that discipline. Government cannot continue to be made larger and more expensive,” Christie said at a news conference last week.

From Bloomberg:

N.J.’s Christie Says Layoffs Out for Cutting Budget

New Jersey Governor Chris Christie said he’s unable to lay off or furlough unionized state workers to help close an $11 billion budget gap.

Christie, speaking at a town hall meeting in Haddon Heights, said job cuts would trigger more than $300 million in contractually obligated raises for remaining state workers under a 2009 wage freeze agreement secured by former Governor Jon Corzine.

“I cannot lay off one state worker, I cannot furlough one state worker,” Christie, 47, said. “It’s an exquisite set of handcuffs.”

New Jersey’s budget was thrown off-balance as the biggest economic recession since the 1930s depressed tax collections and drove state unemployment to a 33-year high of 10.1 percent in December. The state workforce numbers more than 70,000, according to the state Treasury.

From the Star Ledger:

N.J. Gov. Chris Christie says he’s stuck with bill for state worker 7 percent pay hike

Calling it an “exquisite pair of handcuffs” as he tries to plug a huge budget gap, Gov. Chris Christie today said he must follow a controversial deal former Gov. Jon Corzine gave unionized state workers last year that calls for a 7 percent pay raise in the upcoming fiscal year and bars him from ordering layoffs before January.

Christie said he was “wrong” in previously claiming he would not be “bound by” the contract struck between unions and Corzine last June. Under the deal, a pay raise costing the state millions would kick in if Christie orders layoffs.

“My lawyers have now told me that I am bound by that deal,” the governor said after meeting local officials in Haddon Heights. “If I could stop it, I would, except the previous governor tied my hands. I cannot lay off one state worker, I cannot furlough a state worker until January of 2011. That was a great election-year deal he made for us. It is an exquisite pair of handcuffs he put on his successor, but I guess he didn’t think he was going to have a successor.”

Christie, who will unveil his proposed budget next week, has called for cuts to all levels of government — including the public employee pension system, drawing the ire of worker unions.

Soon after he was elected, Christie said he was considering invoking emergency powers to break the deal. Today, he left open the door to “the exercise of executive authority” to address the deal but did not say exactly how that could happen. “I’m going to have to come up with some other ingenious ways to try to accomplish what I need to accomplish,” he said. “We’re going to do what we need to do as best we can, but I cannot just disregard the law, either.”

From the Star Ledger:

N.J. municipalities raise taxes despite state cap

When New Jersey announced that property taxes went up by an average of 3.3. percent last year — the smallest increase in a decade of rapid growth — some hailed it as evidence that a 3-year-old law capping annual increases at 4 percent had finally taken hold.

But a closer look shows the law is hardly a fire wall.

Nearly a third of the state’s 566 municipalities raised property taxes above the cap with the state’s permission last year, many because they were able to show they were facing virtual civic dysfunction, a Star-Ledger review shows. Through hundreds of pages of applications asking to exceed the cap, school and town officials spared no adjectives when describing what would happen without relief: The police force would be cut. Special education aides would be fired. Fire hydrants would not be installed.

“Impossible” one town said of the budget it would produce under the cap. “Catastrophic” disruptions to basic services, warns another.

Still others envisioned Armageddon scenarios:

Carlstadt, where property taxes rose 10 percent, claimed it would “have no alternative but to shut down all operations in the borough.” Lake Como, where taxes jumped nearly 9 percent, said denying a waiver to spend more “would jeopardize the public health and safety.”

Of 76 towns that asked to exceed the cap last year, 62 were approved, according to state records. Of 33 school districts, 25 were approved — though many at a far smaller dollar amount than they asked for. The state granted $12.3 million of the requested $35.4 million in waivers for schools — down from $33.2 million of a requested $58.6 million in 2008. Towns that were approved asked for more than $47 million in exceptions.

Other local governments did not need state permission because the costs driving their tax hikes — such as health care or rising school enrollments were not subject to the cap.

From the Star Ledger:

N.J. legislation could create home buyer tax credit

A state association of real estate agents is backing legislation that would create a New Jersey tax credit for home buyers, according to a release.

The bill, which has yet to make it out of committee, would establish a tax credit much like the federal incentive that is set to expire after the first half of this year, the New Jersey Association of Realtors said.

Real estate brokers, home builders and appraisers have been touting the national first-time home buyer’s tax credit as an integral part to the recent stabilization in home prices.

Some comments on the credit: (Courtesy of Calculated Risk):

The Very Expensive Home Buyer Tax Credit

It’s terrible policy,” says Mark Calabria of the libertarian Cato Institute.

“It’s awful policy,” says Andrew Jakabovics, associate director for housing and economics at the liberal Center for American Progress. “It’s incredibly expensive. It’s not well targeted.”
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“We paid $8,000 to at least 1.5 million people to do something they were going to do anyway,” Jakabovics says.
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“A heck of a lot of people would have bought the house anyway,” says Ted Gayer, an economist at the Brookings Institution.
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The tax break, due to expire at the end of November, is on track to cost $15 billion, twice what Congress had planned. In other words, it will cost $43,000 for every new homebuyer who would not have bought a house without the tax break.

From the Star Ledger:

Gov. Chris Christie warns N.J. districts school aid could be cut 15 percent in next budget

With school districts still reeling from the midyear budget cuts he announced last week, Gov. Chris Christie said today he has asked districts to prepare for a 15 percent reduction in state aid in the budget he will propose next month. If enacted, it would be the largest-ever cut in state aid to schools, officials said. Frank Belluscio, spokesman for the New Jersey School Boards Association, said it would be the first reduction in aid to schools of any kind in at least 30 years.

Christie and Acting Education Commissioner Bret Schundler said at a meeting with school officials in Union County that their goal is to keep K-12 education aid flat in the upcoming budget, which Christie will propose March 16 and must be signed into law by July 1. But they said, with an $11 billion deficit looming, they wanted to give advance warning so school officials would not be caught off guard if steep cuts are necessary.

“This is about us telling the truth,” the Republican governor said. “I’m not going to spend this state further into debt and I’m not going to tell you a happy story on July 1st, only to come to you in February and say, ‘Well, more bad news.’ I think that’s much more unfair to school districts.”

Total formula aid to schools is currently about $7.5 billion, according to a spokeswoman for the state Department of Education. A cut of 15 percent of that would be about $1.1 billion.

“I don’t know how we would survive it,” said Perth Amboy Superintendent John Rodecker. “There would be massive layoffs. It would in turn mean that everything we’ve built up to this point, to make us what I consider to be an outstanding school district, would be lost.”

From the AP:

Audit exposes NJ property tax program flaws

Lax oversight, confusing rules and potential fraud have combined to cost New Jersey millions each year in rebates and tax deductions given to homeowners who may not qualify for them, according to a recently released state audit.
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For years the state has offered rebate programs and tax breaks to seniors and disabled homeowners in the form of checks that are usually mailed out in the fall — just in time for November elections.

But a new report by the State Auditor found that the Division of Taxation, which oversees the programs, and municipalities failed to cross-check records or demand proof from homeowners to make sure they qualify for the programs.

In 2007, the year examined by the auditor, the two programs paid out more than a quarter billion dollars.

“We’re kind of taking people at their word,” said Acting State Auditor Stephen Eells, “and there are improper payments going out.”
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In 2007, the average “freeze” rebate checks averaged $958, according to the Treasury Department. That year, 154,600 senior and disabled homeowners received “senior freeze” rebates totaling $165 million.

A random sample found that 6,000 homeowners who received the rebates were younger than 65, according to federal records. Of those, 405 receiving $318,000 in rebates weren’t receiving social security benefits, indicating that they weren’t as old as they claimed.

The audit also found sloppy accounting; some homeowners who claimed disabilities were listed instead as over 65. And it found that many — nearly 1,250 homeowners who received a total of $1.3 million in rebates — claimed they made less than $60,000 a year while a cross-check against federal tax forms showed they made too much to qualify.
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A look at everyone — 362,000 homeowners — who received the $250 credit in 2007 found 9,162 cases where, according to tax records, homeowners made more than the threshold. That cost the state $2.3 million in lost revenue.
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Former Bogota mayor Steve Lonegan, who ran against Christie in the GOP gubernatorial primary, has long been opposed to the rebate program, calling it a form of “income redistribution.”

He wasn’t surprised to hear that unqualified homeowners were cashing in on it.

“What they really need to do is eliminate the program and cut everyone’s taxes across the board,” he said. “It’s too complex, too costly to administer, too subject to political manipulation. It’s a failed program.”

From Bloomberg:

Corzine Leaves $8 Billion Gap as N.J. Governor Readies Exit

Jon Corzine, only the second sitting New Jersey governor to lose a general election since 1947, makes his farewell speech tomorrow with the third-most indebted U.S. state facing spending cuts as steep as 25 percent to close a record $8 billion budget gap.

The one-term Democrat is leaving with tax revenue down 12 percent since taking office in 2006, local property levies up 9 percent to the highest-in-the-nation average of $7,045 and his Republican successor, former U.S. prosecutor Christopher Christie, proposing state-aid reductions that may force towns to fire teachers, close libraries and stop maintaining parks.

Corzine, 63, the former chairman of Goldman, Sachs & Co., vowed to use his Wall Street experience to repair the state’s finances after his election. After winning increases in taxes and proposing to raise highway tolls 800 percent, he faced mounting voter disapproval as the global recession that started in 2007 pushed New Jersey’s unemployment rate to a 32-year high.

The governor’s inability to erase chronic deficits and the economic slump have left chaos for his successor, said John Mousseau, who helps oversee $1.4 billion at Cumberland Advisors Inc. in Vineland, New Jersey.

“Governor-elect Christie has a hell of a problem ahead of him,” Mousseau said. “Were the expectations higher for Governor Corzine? Obviously.”
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The governor “was unwilling to make the tough decisions he needed to make,” said Senator Kevin O’Toole, a Republican member of the Senate Budget Committee from Wayne. “There was this great hope that he’d be an imaginative, aggressive Wall Street genius who was going to fix state finances in New Jersey. Governor Corzine was ill-equipped to deal with Trenton and with state politics.”
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Christie, 47, takes office Jan. 19 as New Jersey faces an $8 billion deficit in the fiscal year beginning July 1, more than a quarter of the budget and its biggest shortfall ever, according to the nonpartisan Office of Legislative Services. To narrow the gap, he asked state department heads to prepare scenarios for cuts of 15 percent to 25 percent.

From the NYT:

The Hottest Topic in Home Sales

RESIDENTIAL property taxes: Could there be a more potent issue for real estate right now in New Jersey?

Polls indicated that voter concern over high taxes — New Jerseyans pay the highest average of any state — was the defining issue last month in the gubernatorial election that swept Gov. Jon S. Corzine out of office after one term.

Brokers and sales agents report that tax rates are often the first thing on anyone’s lips when a home sale is discussed today.

“We’re now at a point, even in the high-end towns, where people are extremely aware of what they pay in taxes,” said Roberta Baldwin, an agent with Re/Max Village Square in Montclair. “And buyers are very aware of what they might be signing up for.

“You will have some setting limits at the outset on what they are willing to pay in taxes,” she added. “They’ll say, ‘I want the perfect house, but I don’t want taxes over $16,000.’ Or $20,000, or whatever.”
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So what do typical homeowners do when their property taxes reach that point? Relocate?

The answer seems to be that despite vociferous disgruntlement over taxes and a record number of tax appeals this year — and despite recent numbers indicating more people moving out of New Jersey than moving in — buyers remain willing to pay high taxes if they have children in well-regarded schools that the taxes underwrite.

From 2000 to 2008, a period during which average property taxes rose by 50 percent, to top out slightly over $7,000, a total of 439,000 people left the state, according to James W. Hughes, the dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. Over that same period, he said, 385,000 moved in, many of them immigrants.
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Looking within the state — with its extreme tax rate disparities from county to county, town to town, and sometimes even house to house — it is also difficult to discern how, or if, taxes actually affect sales, or the desirability of a particular place.
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Ms. Baldwin said she long ago confronted the issue of the high property taxes that she has paid as a resident of Montclair for more than 25 years.

“We thought we had reached a breaking point when we were going to have the kitchen redone in our home, and looked at the assessments, and found our house worth less than we had paid for it while our taxes had gone way up,” she said.

She said she and her husband cruised around “lake country,” looking at houses in Passaic County — and fantasizing.

Then, reality sank in: “We don’t want to move out to the country. We need to live in this wonderful town, with all these smart and artsy people we know and like, and wonderful culture, and so close to Manhattan. And we are willing to pay for it.”

From the Star Ledger:

N.J. investigations unit reports huge payouts by local government

They receive paid days off for Christmas shopping, donating blood and weddings. And when these public employees retire, they can cash in tens of thousands of dollars worth of unused sick time and vacation days.

Extensive taxpayer-funded benefits for some local government employees are straining the budgets of New Jersey municipalities, according to a report the State Commission of Investigation released today.

Despite a recession that has depleted tax revenue and forced layoffs, the report says, municipalities continue to spend tens of millions of dollars on big payouts to retiring workers.

“The gravy train continues to roll without impediment for select groups of employees on the public payroll,” it reads. “Startling amounts of taxpayer-funded booty continue to be dispensed across New Jersey without regard for the common good.”

The SCI, which examines crime and corruption and reports to the Legislature, said it discovered $39 million in extravagant payouts after reviewing 75 towns, counties and local authorities. State employees can receive a maximum of $15,000 for unused sick time, but such limits aren’t standard at the local level.
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The SCI report is a black eye for municipalities who have clamored for more state assistance to help cope with the recession. Lawmakers on both sides of the aisle expressed outrage over the expensive perks.

“It shocks the conscience,” said Assemblyman Lou Greenwald (D-Camden), who pledged legislation to cap severance payments. “The taxpayers have every right to be offended.”
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Montclair State University Brigid Harrison expects political power struggles if the state cracks down on employee benefits at the local level.

“Counties are often political fiefdoms,” she said. “County freeholders or executive boards get to pad the ranks of public employees with political supporters.”

From the Daily Record:

Do we really love home rule?

A recent poll says residents are not as enamored with their home towns as some think.

A Quinnipiac University poll asked residents if they would support merging school districts and municipalities to lower property towns. Some 73 percent said yes. Only 22 percent said no.

That response does not surprise us. Of course, a majority of New Jersey residents probably would agree to just about anything if the offer was accompanied by the words, “reducing property taxes.”

Notwithstanding, the results are interesting.

It is true that merging some towns and school districts is not going to solve the state’s property tax crisis. No one should think that. But merging jurisdictions and eliminating high-paid public jobs, and the benefits that go with them, would help.

Most of those who like home rule are those doing the ruling. That is why we do not see mergers.

Just about every recent governor has talked about reducing the more than 1,100 combined school districts and municipalities in New Jersey, but the talk does not go very far.
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The record is clear. With rare exception, towns are not going to combine themselves. (One exception may be the Chesters in Morris County where a merger is being considered.) Before that, the last municipality to voluntarily “go out of business” was Pahaquarry in Warren County. The town had fewer than 50 full-time residents and most of it was parkland.

From the Star Ledger:

N.J. budget deficit grows to $1B for current fiscal year

The state today said it is facing a $1 billion hole in this year’s budget — a shortfall five times bigger than previously disclosed — and will cut funding for schools, municipalities, higher education, hospitals and pension plans to help close the gap.

A Treasury spokesman said the state collected $412 million less in taxes than expected through October.

“It is going to be a gut-wrenching experience,” said Bill Dressel, executive director of the New Jersey League of Municipalities.

The crunch has already led to a disagreement with Gov.-elect Chris Christie, who has called for spending freezes. On Tuesday, Corzine and Christie clashed over emergency funding for food banks and soup kitchens.
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That revelation is the latest budget problem facing New Jersey as it grapples with fallout from the deepest economic downturn since the Great Depression. Two days after he lost the election, Gov. Jon Corzine said the state needed to find $400 million in savings to cover shortfalls that included $190 million in anticipated taxes that did not materialize.

In addition, the state already will start off next fiscal year’s budgeting process with an $8 billion hole, according to a report from a nonpartisan legislative office.

The depth of the state’s current $1 billion shortfall was not revealed until today, when it was included in a required statement sent to Wall Street bond investors. It means officials now have to tell people who were expecting money they will not be getting it.
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It is the second straight year the state has been forced to make mid-year budget adjustments to deal with revenue shortfalls in the billions.

From the APP:

N.J. budget deficit could reach $1.5 billion

New Jersey’s budget problem worsened in October, with a $222 million shortfall that exceeded its deficit in tax collections from July, August and September combined.

In a prospectus sent Wednesday to prospective bondholders, the state says its deficit could be $1 billion. It said that could be closed in part through “up to $400 million actions affecting major cost centers, including: school aid, municipal aid, higher education, hospitals and the state contribution to the pension plans.”

However, the 5.1 percent, $412.7 million year-to-date tax shortfall would, if maintained over the course of the next eight months, leave collections almost $1.5 billion behind budget.

Odds are it won’t, as tax collections fluctuate. Sales tax revenues are greatly influenced by the Christmas shopping season; income taxes could see a bump from Wall Street bonuses, but that won’t be known until April and May.

From New Jersey Newsroom:

As N.J. budget shortfall grows, local, school aid at risk

With the deficit for the current 2010-11 state budget growing toward $1 billion, the outgoing Corzine administration could be forced to cut aid to cities, towns, schools, and hospitals as well as state contributions to public employee pension plans.

The grim outlook became public Wednesday in a state report sent to Wall street bond investors.

“Largely due to continuing revenue shortfalls and the need for supplemental appropriations, the projected deficit by the close of the current fiscal year (June 30) is now estimated at $1 billion,’’ said Sen. Barbara Buono, chairman of the Senate Budget and Appropriations Committee. “Obviously, many worthy and deserving programs that are in need of state funding will have to make do without it. We have no choice – there simply isn’t enough money to sustain our current state budget, let alone any additional spending proposals.’’

From the Star Ledger NJ Voices Blog:

Property taxes the major concern for N.J. voters despite political affiliation

Route 78 cuts through New Jersey. More accurately, it cuts through the many New Jerseys.

Every dozen or so miles, the towns off the highway sit like still portraits of time and place; museum dioramas of vastly different scenery, architecture and lifestyle.

All are New Jersey; from hills over the Musconetcong Valley, to the ridges of the Watchungs, to the flatlands of the Newark Basin. All are home; from the simple mill houses in rural Stewartville to the planned mini-manses of The Hills, to the oldish manors of North Summit, to the new three families in the South Ward of Newark.

West to east, from rural to suburban to urban, the counties of Route 78 are political microcosms of greater New Jersey. Out west, rural and suburban Warren, Hunterdon and Somerset go Republican red. To the east, Union and Essex go Democratic blue. But today, purple was in the air as voters in all these places shared one major concern.

Property taxes.

From the Press of Atlantic City:

Christie’s tough task

Voters on Tuesday wanted change - they wanted it enough to overcome New Jersey’s powerful Democratic Party organization and elect Republican Chris Christie as the next governor of the state.

The victory in many ways was surprising. While Christie was ahead in the polls for months, his lead eroded after Gov. Jon S. Corzine poured huge amounts of his personal wealth into the campaign, much of it for negative advertising. Democratic superstars - including President Barack Obama - made multiple visits to New Jersey on Corzine’s behalf.

But this election was not about Obama. It was about Corzine - and the entrenched problems of New Jersey that he has not been able to solve.

Now, for Christie, the really tough job starts.

From the NY Post:

Jersey voters dump Corzine for Christie

Chris Christie last night became the first Republican to be elected governor of New Jersey in more than a decade — a stunning triumph that came just days after President Obama put his prestige on the line and visited the Garden State to urge voters to re-elect Democrat Jon Corzine.

With 99 percent of precincts reporting, Christie, a former US attorney who pledged to cut the state’s enormous tax burden, had 49 percent of the vote over Corzine’s 45 percent.
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“This election was and is about the future of the state of New Jersey,” Christie said last night in a victory speech at the Parsippany Hilton.

“Tomorrow, together, we begin to take back New Jersey. Tomorrow we will fix this broken state.”

To cheers, he vowed to “pick up Trenton and turn it upside down.”

Thought this was obvious, especially since the average home price is over a million. Hard to swallow an argument about a “poor homeowner” who can’t afford taxes when you are talking about Millburn. How about you sell the house and move a town over? You’d probably make a fortune doing it too.

From the Star Ledger:

Millburn residents suffer under property taxes that are highest in N.J., nation

The little pond in Taylor Park here was once the town swimming hole.

Today, the town pool at Gero Park has a water slide in the big pool, a waterfall umbrella in the wading pool, and a snack bar. The tennis courts there are lit at night, and there is a roller hockey rink. Nearby is a par 3 golf course. Millburn’s tax dollars at work.

Like many New Jersey towns, Millburn’s schools, services and recreation have grown exponentially during the past few decades, much of it paid for by property taxes. In Millburn, the average homeowner pays $18,159 a year in property taxes.

“We’re the highest town in the highest state, so that must mean we’re the highest in the nation,” said Tom Thomas, a formermayor and member of the Old Guard, which meets every Thursday in an old civic center next to the pond.

Yes, New Jersey’s property taxes are the nation’s highest. It is government’s sustenance: Property taxes account for 45 percent of all tax revenue raised in New Jersey. The national average is 29 percent.

Some say high property taxes have turned into a terminal disease for the state. High taxes and high home prices are conspiring to drive people out, which, in time, will flat-line New Jersey’s real estate values — if it hasn’t already. New Jersey: First in property taxes, near first in resident exits. Since 2000, the state lost 163,000 households and $12.8 billion in gross income.
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Even this may not help senior citizens in high-end towns, where property values drive taxes upwards into the $25,000 to $40,000 range.

“This is especially prevalent among seniors, who are finding it difficult to stay in their homes in New Jersey,” Moran said.
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The high taxes are linked by formula to property values. Millburn’s average home price, which is $1,088,148, but many seniors don’t want to cash out. They want to stay.

From the NY Times:

As Property Taxes Become a Real Burden, Can Backlash Be Far Off?

The list from census data isn’t all that surprising, but there it is.

Westchester County, No. 1. Nassau, No. 2. Hunterdon and Bergen in New Jersey, Nos. 3 and 4, respectively.

And so it goes. Of the 10 counties in the country with the highest median property taxes, every one is in New York or New Jersey.
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This, as anyone who breathes oxygen knows, is a high-tax region. But as Richard Nathan packed up his office on Friday after 45 years of studying or participating in state, local and federal tax and budget policies, he wondered if we had finally reached a breaking point.

“I’m a little surprised there hasn’t been more heat and more agitation about tax caps and tax burdens in the way there has been in other parts of the country,” said Dr. Nathan, who retired as co-director of the Nelson A. Rockefeller Institute of Government at the State University of New York at Albany. “I keep thinking, ‘When is this dog going to bark?’ And the numbers make you think it’s going to be soon. It just feels different right now.”
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“It’s the No. 1 issue,” he said. “People have reached their breaking point. But we still have a long way to go in connecting the dots between dysfunction in state government and high property taxes.”

Still, breaking point or not, who knows where this goes? A Proposition 13-style temper tantrum? Painful cuts — meaning teachers and police? Throw out the bums — most likely Democrats, who could be fat targets in an antitax backlash? Lots of grumbling but living with an increasingly unaffordable status quo?

From the Philly Inquirer:

Homeowners are challenging property-tax assessments at a record rate

With the ebbing of the real estate market, a record-bursting tide of property-tax appeals is inundating assessment offices all over the region - and the nation - with appeal numbers double and triple what they were last year.

What is happening locally “is a microcosm of the whole country,” said John Garippa, a New Jersey tax lawyer and president of the American Property Tax Counsel in Chicago. “It’s an incredible, incredible number of appeals.”

New Jersey has smashed records for county-level and court filings, he said. Camden County’s 1,260 appeals were triple last year’s. More than 14,000 were filed in Ocean County, and with an April 1 appeal deadline, the county typically wraps up hearings during the summer; this year, they will be lapping into November.
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The assessment offices are in the recessionary cross-fire because, of all the major levies, real estate is the only one that a taxpayer can fight. Wage, sales, and head taxes are immutable, but a property-tax bill is arguable.

The tax bill is based on the assessment - the portion of market value that is subject to taxation. And if a property owner can demonstrate that the true market value is less than the assessors’ estimate, the tax bill can be lowered.

With property values sagging, the appeals business is surging. It’s not surprising that the Garden State’s appeals would be off the charts, said Jerry Cantrell, president of the New Jersey Taxpayers Association, because the state’s real estate levy is among the nation’s highest. “It hits everybody,” Cantrell said.

If the big driver in New Jersey is the sheer magnitude of the bills, the tax matrix is a tad more complicated in Pennsylvania.
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Tax experts think that with values continuing to fall, the appeals business will continue to rise.
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Said Sharkey: “I think next year is going to be worse.”

From the Vineland Daily Journal:

Property taxes are stealing our way of life

New Jersey’s property tax system is broken. But you already know that.

What is not well known is that property taxes promote disparities among economic and racial groups. Those who miss tax payments are almost instantly pushed deep into debt.

The system punishes the poor and middle class, yet offers corporations and the super-rich vast tax break opportunities.

It is an archaic tax that preserves New Jersey’s fragmented system of government — 566 municipalities, 605 school districts, and more than 400 other local taxing authorities. That’s the most per square mile of any state.

It is a tax driven by runaway local government spending, political paralysis at all levels by both parties and patchwork budget remedies.

And it is a tax that ultimately hurts you.
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Although New Jersey governors and legislators have talked about reform for the past half-century, little has been done to correct the vast inequities of the property tax system.

With the deepest recession in 70 years forcing thousands of people out of jobs, and hammering countless others, property taxes have become the No. 1 issue voters want addressed by the gubernatorial candidates this election year, according to Monmouth University/ Gannett New Jersey polls.
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New Jersey’s tax system is dysfunctional because it deters job growth and long-term economic planning, said Joseph Henchman, director of state programs for the Washington-based Tax Foundation, which has studied state tax policies since 1937.

“There is no bright spot in New Jersey,” he said. “Most Americans gripe about property taxes, but New Jersey residents genuinely have a broken property tax system.”
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There is no end in sight for the nation’s highest average annual property tax, which was $7,045 per household last year.

At the current pace, the average homeowner will see a $9,200 tax bill by 2015, $10,000 by 2017.

This is happening in a state in which the economy is stalled and the median household income dropped 10 percent — about $7,200 — from 2006 to 2008.
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But the trouble for many homeowners is that the property tax has no heart.

It is a tax based on what your town says your property is worth, not your income.

If you lose your job, if you fall ill, if your stock market nest egg evaporates or if some other financial calamity befalls you, you at least will get a break from the income tax because you’ll drop into a lower income bracket.

There is no such break with property taxes. A $7,000 bill is still due regardless of your income or financial straits. Miss a couple tax payments and you could find your dream home on the market in a tax-lien sale.
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“What’s happening in this recession … is people are very hard pressed to pay the highest property taxes in the nation,” said Joseph J. Seneca, a professor at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy, who has studied New Jersey’s economy for decades. “You have understandable frustration. … As a percentage of income, the burden gets higher and higher.”