Christie Pushes Income-Tax Cut as Democrats Eye Property Levies

Governor Chris Christie told a group of business leaders that Democrats in the Legislature may jeopardize New Jersey’s economic recovery by putting social issues ahead of job-creation and tax cuts.
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“They want to play around with social issues to try and make people look bad,” Christie said. “Here’s what the public is going to care about: Are they working? Are they working in a job that pays well and provides their family with health insurance?”

Christie’s remarks echoed his Jan. 17 State of the State speech to the Legislature and a subsequent series of public meetings in which he pressed his case for hastening what he calls “the Jersey comeback” by cutting taxes. The Washington- based Tax Foundation yesterday ranked New Jersey last among U.S. states in terms of business climate.
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Assembly Majority Leader Louis Greenwald, a Cherry Hill Democrat, said his party is weighing “a couple of ideas” to lower pressure from New Jersey’s highest-in-the-nation property taxes. He declined to give specifics following Christie’s speech, while saying any relief would be both immediate and long-term.
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Christie took office in 2010 pledging to cut taxes as the state’s economic conditions improved. He said his proposed reduction would spur the state’s economy, which he added should be the top issue in Trenton.

“Do they care about the stuff we’ve been talking about for the past week?” Christie said, referring to state residents. “What they care about is whether their husband or wife will have a job, will they have money to put food on the table?”

The governor has so far declined to say how he’d make up for the revenue if taxes are cut. Democrats have said a 10 percent rollback may mean as much as a $1.1 billion decline in state receipts.
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“People care about civil rights, and they also care about the middle-class property tax relief and job creation plans this governor vetoed as he zealously protects and advocates for tax cuts for the rich,” Tom Hester, a spokesman for Assembly Speaker Sheila Oliver, said last night. “His priorities are so out of step with working class New Jersey.”

Oliver, a Democrat from East Orange, has said that an analysis by her office showed a family with a $50,000 annual income would pay $80 less in taxes under Christie’s plan, while someone earning $1 million would save $7,200.

Special Report: Did N.J. property tax reform help most taxpayers?

New Jersey homeowners paid an average of 2.4 percent more for property taxes in 2011, the smallest increase in nearly two decades, showing Gov. Chris Christie’s push to restrain local levies might be working.

A Star-Ledger analysis of taxes in all 566 New Jersey towns shows the average property tax bill was $7,758 last year, an increase of about $182 from 2010.

Although more than 82 percent of the towns saw some increase in their average property tax bills last year, the 2.4 percent increase was a significantly slower rate of growth, the newspaper found. In 2010, property taxes rose 4.1 percent and year-over-year increases topped 7 percent for three consecutive years in the middle of the past decade.

The last time property taxes rose by such a small rate was 1992, when they went up 1.9 percent, according to state figures.

Christie has made reining in New Jersey’s highest-in-the-nation property taxes a big goal of his administration. Along with the Democrat-controlled Legislature, he limited property tax collections for towns, schools and counties at 2 percent, starting last January.

“Am I satisfied? Of course not. Unless you told me it was 2 percent, I wouldn’t be satisfied,” Christie said in an interview. “But we’re making great progress. When you think that in the 10 years before I became governor, property taxes went up 70 percent in 10 years and now people are talking about 2-and-change increase, that’s great progress and progress that nobody else before we got here created in this state.”
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The analysis found:

• In total, towns, counties and schools collected about $25.6 billion from taxpayers in 2011, a 2.5 percent increase from 2010.

• Loch Arbour Village in Monmouth County had the highest average property tax bill at $22,715. Tiny Tavistock Borough, Camden County, came in second with $22,297, followed by Millburn, where the average property taxpayer coughed up $19,989.

• The least expensive place to live in New Jersey was Walpack in Sussex County, where the average taxpayer paid about $514.

• Bergen, Morris and Union counties had the highest average property taxes in 2011. The average Bergen County taxpayer paid $10,317, a 2.6 percent jump from 2010. Morris County’s average bill was $9,644, while Union County overtook Essex for third place, at $9,493.

• The lowest county average was in Cumberland, where the average tax bill was about $3,419 in 2011, down 1 percent.

• Together, the three taxing authorities (towns, schools and counties) exceeded a 2 percent increase in collections in 312 towns, while 165 stayed within 2 percent and 89 saw the levy stay the same or decrease. In 2010, 529 towns saw an increase in their total tax levy, 425 of which went over 2 percent.

• Counties were more successful than towns and schools in keeping their tax levy below the cap.

From the Record:

‘Fake farmers’ get property tax break

Some New Jersey corporations, developers — and even a few politicians — get a tax break for growing as little as $500 worth of crops such as Christmas trees, using a law that critics say means higher property taxes for everyone else.

So-called “fake farmers” were faulted for taking advantage of a farmland tax break at a Senate Environment and Energy Committee hearing Thursday where lawmakers discussed doubling the minimum sales needed to qualify for the state’s farmland assessment.

“Time and again, we hear stories of this program being abused by owners of large, valuable residential properties to avoid paying their full property tax bill,” said Sen. Jennifer Beck, R-Monmouth.
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The farmland assessment dates back to the 1960s, and was designed to help struggling farmers while also discouraging the development of open space in a state known for its high real estate prices.

But opponents now see the tax break as outdated, and something many wealthy landowners are abusing to avoid paying their full property tax bills. The average property tax bill in New Jersey averaged a record-high $7,576 last year, but bills easily top $25,000 on larger properties.

Beck is sponsoring legislation that would double to $1,000 the minimum gross sales required to qualify for the farmland assessment, which sharply reduces how much property taxes are due on the part of a property that is used for agriculture.

The bill would also compel landowners who claim their property as farmland to submit clear evidence of agricultural sales or income to the state Division of Taxation. And local tax assessors would have to receive training on farmland assessments.
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Jeff Tittel, executive director of the New Jersey Sierra Club, cited an example of a 5-acre lot — the minimum allowed to qualify for the assessment — with an expensive home that uses only a fraction of the property to cultivate enough Christmas trees to qualify for the tax break.
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No votes were taken on Beck’s bill Thursday, and it may not make it out of the Legislature before the current lame duck session ends early next year. But Beck, who’s been pressing the issue since she took office in 2008, pledged to keep pushing.

“It is time to close this ‘fake farmer’ loophole and ensure that only true farmers who produce substantial agricultural output be eligible for the program,” she said.

Gov: Mergers can help towns save tax dollars

Gov. Chris Christie threw state support behind the successful effort to consolidate the Princetons into one town, but said he is not sure how many more town mergers are in the forecast.

“This has been an effort in the works since 1953,” Christie said of the merger of Princeton Township and Princeton Borough, which is expected to be complete within a year and will reduce the number of New Jersey municipalities to 565.

“In New Jersey, as you know, it’s slow and steady. We eventually got there,” he said.

Christie held a town hall meeting Tuesday at the Princeton Public Library, here in the borough, taking a victory lap two weeks after residents of the two towns approved a merger referendum.

A study commission said combining the governments would save more than $3.2 million mostly through elimination of redundant administration and services. Christie sweetened the pot with a proposal for the state to pay for first-year consolidation costs and allowing towns to spread other transition costs over five years.

There had been three failed previous efforts to consolidate the Princetons, most recently in 1996.

Christie, accompanied by Princeton Township Mayor Chad Goerner and Princeton Borough Council President Kevin Wilkes, told an audience of 150 people that merging towns is one way to achieve local government savings and “challenge the status quo.’’

But consolidation is not for everybody, Christie said, and added that it can be encouraged by the state, but should not be mandated.

“I think locally driven discussions are the only way to do it,” he said. “It’s a contentious and emotional issue for some and also a complicated one.”

Currently, there is little other formal movement toward connecting towns aside from proposed unions of tiny Merchantville and larger Cherry Hill, and of Scotch Plains and Fanwood.

Taxes will continue to rise because we need to pay for services consumed in earlier years. The amount of taxes paid in a single year does not pay for the services consumed in that year, because municipal and state governments can borrow money beyond your ability to pay it back. Now, to balance the spending, we need to both consume fewer services than in those previous years, while simultaneously paying higher taxes to cover the previously borrowed debt. When you are paying higher taxes for reduced services this year, thank the old guy down the street, and the politicians he voted for, because they didn’t pay their fair share. What you don’t understand Mr. Mintz, is that it’s you who are the problem.

Rant off.

From the Daily Journal:

Christie’s Cuts – Higher property taxes, fewer cops, rising crime rates in some areas

First, the good news: Property tax increases have slowed in many New Jersey towns.

But the bad news is that many residents have seen municipal services cut as their taxes continue to climb.

Cities and suburbs all over New Jersey have laid off police officers and other public employees in the past 12 months as a drop in state aid and lingering economic doldrums have put the squeeze on municipal finances.

While many towns were able to keep property tax increases at or below a newly imposed 2 percent cap, municipal officials have been forced to cut jobs and slash services to keep from raising taxes even more.

The average property tax bill in New Jersey rose $167 this year, to $7,754, according to a New Jersey Press Media analysis of certified property tax rates in 545 of the state’s 566 municipalities. (The 21 other municipalities, including some of the state’s largest cities, have not yet set their rates.) New Jersey has been home to the highest average property tax in the nation for a number of years.

From 2010 to 2011, the average property tax bill rose 2.2 percent, slightly more than half of the 4.1 percent increase seen a year earlier.

The smaller increase is little consolation to people like Ocean County resident Barry Mintz. Property taxes on his home in Brick Township are now $8,500, up from about $5,000 when he moved in just 12 years ago. As taxes rose, municipal services declined, he said.

“We used to have twice-a-week garbage collection and now it’s down to once a week,” Mintz, 71, said. “When you downsize the public works department and cut services, what am I paying for?”
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New Jersey government payrolls, including local, school, county and state workers, dropped by 29,000 at the end of last year, down to 622,000 jobs, according to the federal Bureau of Labor Statistics.
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Gov. Chris Christie pledged to shrink the size of government during his 2009 campaign.

His spokesman Michael Drewniak last week said New Jersey has experienced “a remarkable turnaround, when you look at the skyward trajectory of state and local spending and resulting property tax hikes year after year in the decade before this administration arrived in Trenton.”
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In Camden, the average property tax bill rose 10 percent, to $1,363.

In Newark, it rose 5.9 percent, to $6,063.

In Paterson, where 125 police officers were laid off, property tax bills jumped 17.4 percent, to an average of $8,833.

“Anyone who is honest and realistic with themselves knows that New Jersey and its municipalities were living beyond their means for way too long,” Drewniak said.

Montclair reassessment will impact all property values

All Montclair property owners can expect their property tax assessments to change following a reassessment that’s now in progress, some more than others, the company doing the work told the Township Council Tuesday night.

Steven Rubenstein of Realty Appraisal Co., himself a Montclair resident, did a presentation to the council at its pre-meeting discussion session. His company will working off of a land and building database created during a township reevaluation five years ago.

“We will be revising all of the values from that 2006 reevaluation, including the thousands of properties that have been changed since that time,” Rubenstein said, later adding, “This is a downward reassessment.”

Under questioning by 2nd Ward Councilman Cary Africk, Rubenstein said that even Montclair residents who had successful tax appeals will have updated assessments.

“All assessments will change,” Rubenstein said. “Every single assessment will change. Some will change a lot more than others.”
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The point of the reassessment is to adjust the property values throughout Montclair so they reflect current market values. Real estate prices plummeted after Montclair’s reevaluation was done, prompting Montclair residents to file tax appeals that reflected the decreased value of their homes. Those successful appeals have proven to be a huge financial burden on the township, with $2.1 million in tax refunds required last year and as much as $4 million being projected this year by Township Attorney Ira Karasick.

In addition, there’s a need to level the playing field in Montclair, so that property owners who never filed appeals, but whose home values declined, are not shouldering an unfair burden in terms of local taxes.

“The assessment seeks to restore the uniformity that’s been severely eroded by five years of tax appeals that have plagued the township,” Rubenstein said. “The taxpayers who have filed appeals over the last five years have gotten reductions. Their assessments are not going to change as much as some of the other assessments in town. Their new reassessment value may not be much lower than what they’re at now. For the thousands of property owners that have not filed tax appeals over the last five years, and whose assessments are therefore the same now as they were in 2007, those are the properties that are going to see the most percentage change in their new value.”

Suits allege Fannie, Freddie owe millions in real estate transfer taxes in Michigan

Fannie Mae and Freddie Mac are using tax-exempt status to escape county fees levied during the recording of foreclosure property transfers, two Michigan county leaders said in lawsuits this week.

Andrew Meisner, treasurer of Michigan’s Oakland County, and Oakland County Executive L. Brooks Patterson sued Fannie and Freddie in the U.S. District Court on behalf of taxpayers in their county.

Oakland County claims the GSEs owe area taxpayers more than $12 million in unpaid real estate transfer taxes on the sale of foreclosed properties, according to a press release from Meisner. Meisner told HousingWire he believes this is one of the first cases challenging the GSEs’ ability to claim exemption from fees on the grounds that they’re government agents.

In a statement, Meisner wrote, “Fannie and Freddie you quack like a duck (or a private corporate entity), so you better pay up.”

He added, “In this case, Fannie and Freddie walk, fly and quack like private companies, right down to the multimillion-dollar salaries for their CEOs. That means that they are not entitled to exemptions made for government entities.”

The Oakland County plaintiffs contend Fannie and Freddie are not exempt from Michigan’s real estate transfer tax, which requires parties transferring properties to pay $1.10 per every $1,000 in value to the counties, while the state receives $7.50 per every $1,000 per transaction.

In the suit, the Oakland County treasurer is trying to reclaim fees tied to 200 real estate transactions that occurred over a period of six years.

In the same state, the Ingham County Register of Deeds Curtis Hertel Jr. filed suit against the two GSEs, Bank of America (BAC: 10.52 0.00%), Wells Fargo (WFC: 27.26 0.00%), Countrywide Home Loans Servicing, and the law firms of Orlans Associates and Trott & Trott P.C.

Hertel claims the defendants tried to escape a transfer tax by moving the assignment of the mortgage. “What you see is literally within one or two months before a foreclosure is filed, they transfer assignment of the mortgage to Fannie and Freddie,” Hertel said. “Why would they do that right before the foreclosure is about to happen … obviously it is to avoid fees.”

Hunterdon County, N.J., Has Highest Taxes

Residents of New Jersey’s Hunterdon County pay the highest property taxes in the U.S., according to the Tax Foundation.

The annual median property tax in Hunterdon, about 60 miles (97 kilometers) southwest of Manhattan near the Delaware River, was $8,216, a report issued today by the Washington-based organization shows. Suburban Westchester and Nassau counties, both bordering New York City, ranked second and third, respectively, at $8,206 and $8,160.

“The only source of revenue to pay for a broad spectrum of services in New Jersey is the property tax,” said William Dressel, executive director of the New Jersey League of Municipalities. “The property tax in many states is not the dominant source of revenue for local services.”
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New Jersey Governor Chris Christie has made a 2 percent cap the centerpiece of his plan to control growth in New Jersey’s property taxes, which averaged $7,576 last year. Real estate levies, the main source of funding for schools and towns, have climbed 70 percent in the past decade.

All but two N.J. towns vote to reject raising property taxes over Gov. Christie’s 2 percent cap

Voters rejected property-tax increases in 12 municipalities today, while two towns approved special ballots to exceed the new 2 percent municipal property-tax cap.
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Today was the first time in New Jersey that localities asked voters for permission to raise taxes, a provision of the Christie administration’s 2 percent cap on property tax collections. Previously, towns appealed to the state if they wanted to exceed a 4 percent cap.

The day marked the culmination of months of anticipation by municipal experts and governing bodies. Officials in the 14 towns holding property-tax votes held public meetings and circulated letters telling residents what was at stake — in most cases jobs and services.

N.J. commercial property owners filing in record numbers

In 2007, the Shanahan brothers who own Washington Garage, a small auto repair shop on Main Street in Bergenfield, paid $22,107 in property taxes.

After the town conducted a revaluation two years later to bring its property assessments in line with market values, Washington Garage’s yearly property tax bill shot up 70 percent to $37,520. The revaluation shifted tax burdens from residents to commercial property owners.

Higher property taxes have squeezed the business, whose annual revenue has fallen from $1.4 million in recent years to about $900,000 annually and its profit margin has fallen below 1 percent, according to Brian Shanahan, who along with his brother Tim run the repair shop their grandfather founded 80 years ago.

“They’re bleeding us to death,” Shanahan said. “It’s just too much of a burden.”

As commercial real estate owners deal with the recession’s lingering effects, record numbers of them this year are expected to appeal the assessed values of their properties, which determine how much property taxes they pay to municipalities.

The appeals, if successful, could shift tax burdens and add to municipalities’ financial strain in a year in which employee pension costs are rising and as a 2 percent cap on property taxes goes into effect.
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Multiple appeals for single properties build up over the years, and eventual settlements can clear multiple cases. For example, Elmwood Park-based paper products maker Marcal Manufacturing LLC recently settled six years’ worth of tax appeals with the town. This month, Elmwood Park sent Marcal two checks worth a total of $649,996, Borough Clerk Keith Kazmark said.
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“This is the toughest year yet since the recession began,” said Julie Beglin, a vice president on the public finance team at the bond rating agency Moody’s Investors Service.

Tax assessment appeals on rise

Knowing how to get a property tax bill reduced has made Terri LaPoint one of the most popular people in town.

In the past couple of years, the Brielle resident has helped about 15 of her friends and neighbors navigate New Jersey’s property tax appeal system.

“People don’t know they can do this. It’s very easy,” she said.
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Because property taxes are tied to a home’s assessed value, that meant that many homeowners — herself included — were paying more than their fair share.

The remedy: appealing the assessment to the county Board of Taxation.

LaPoint said everyone she’s helped so far has slashed their assessments by at least $65,000. One couple cut their property tax bill by $1,900 the first year. LaPoint lopped 20 percent off her own assessment, saving herself nearly $1,500 in taxes.

Her advice: If you think you’re over-assessed, find out what comparable homes in your town are selling for, and if the evidence is there, file an appeal.

The deadline is soon: April 1. If your town had a municipal-wide revaluation or reassessment in the past tax year, then the deadline is May 1.

“If you have an hour, you can do this,” LaPoint said. “I mean, you have nothing to lose.”
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Cash-strapped New Jersey homeowners, saddled with the highest property taxes in the nation at an average of $7,576 per home, are getting the message.

More than 74,000 property tax appeals were filed last year, triple the amount in 2007, according to the New Jersey Division of Taxation. Residential homeowners filed approximately three-quarters of the appeals.

The total was the highest in 17 years, in large part because of the sharp decline in home values. About 60 percent of all appeals led to a revised assessment, resulting in $3.2 billion in assessed value reductions, a 9.5 percent rollback, state figures show.
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That outcome isn’t surprising, given that assessments in many municipalities across the state are badly out of whack.

A New Jersey Press Media analysis of home sales data found that inaccurate assessments likely cost New Jersey property owners as much as $1.6 billion in annual property tax overpayments.

12 N.J. towns look to override Christie’s property tax cap

Your property taxes were even worse than you thought last year. New Jersey’s taxpayers paid out nearly $1 billion more on their bills in 2010.

The old 4 percent tax hikes raised the average property tax bill in the state by $295 to $7,576.

According to NorthJersey.com, in North Jersey, property tax bills went up on average even more in 2010; to $10,057 in Bergen County, and $8,459 in Passaic County.

The Asbury Park Press reports it is the largest increase since 2007, when taxes spiked 7.3 percent.

The state’s 566 municipal governments saw the sharpest tax increase at 7.1 percent – the same towns that are now facing a 2 percent cap on their taxes this year. School taxes rose 3.3 percent and county taxes rose 1.5 percent last year.

New Jersey Governor Chris Christie last year signed a measure capping growth in the taxes as of Jan. 1 at 2 percent unless local governments ask voters for permission for a bigger increase. The law also exempted higher levies to cover bond payments, increased health-insurance or pension costs and natural disasters.

Already at least 12 New Jersey communities want to exceed his 2 percent cap, reported Bloomberg.com, less than three months after it took effect.

The communities placed advertisements in newspapers alerting voters to referendums in April, Bill Dressel, executive director of the New Jersey League of Municipalities said yesterday in an e-mail. Towns readying for the referendums included Brick and Edgewater Park, he said.

Towns scheduled to hold referendums, according to the League of Municipalities are Brick, Edgewater Park, Florence, Hardwick, Hope Township, Lambertville, Plumsted, Mansfield, Maurice River, Mount Holly, Mount Laurel, and Northvale.

In many N.J. towns that undergo revaluations, homeowners end up paying more open space taxes

In the nation’s most densely populated state, Garden State residents value their space.

But they may not be so thrilled about what they are paying for it. The reason is a tiny municipal tax for open space — pennies per $100 of a home’s valuation — that, left unchecked, has added up to big bucks in some towns.

The result is homeowners in 50 New Jersey towns have paid out some $15 million more to preserve land, farms and historic and recreational sites than they had in previous years. In one town last year, the tax bills jumped by more than $150 for some homeowners.

The quirk comes into play when towns conduct revaluations. The problem is towns — which make adjustments to prevent other slices of the tax pie from skyrocketing — fail to do the same for the open space tax. Because that tax’s rate is tied to property values, the levy goes up when properties appreciate.

The longer a town goes between revaluations, the more homes are worth and the bigger the bite taken by the open space tax.
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Over the last five years, 71 New Jersey towns with open space taxes underwent property revaluations. Nearly three-quarters of them failed to adjust their open space tax rates, leading to a 128 percent increase in their combined levies — a windfall of more than $15.5 million. By contrast, municipal taxes in those towns rose an average of 12 percent.
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“I don’t think there was any malicious intent in their error,” said Librizzi, who currently serves as the tax assessor for Verona, Nutley and North Caldwell. “I don’t think the general public completely understands how the open space tax is calculated.”

Paterson officials will argue to limit tax increase

City officials will travel to Trenton on Monday to plead their case for a lighter municipal tax increase.

The state Department of Community Affairs, which must approve Paterson’s budget by Feb. 28, has recommended the city raise municipal taxes by more than 40 percent in order to close a $54 million deficit.

The 40 percent increase would mean taxes on a home assessed at $350,000, the city average, would go up $1,400.

The City Council wants to limit the increase to $544, meaning next quarter’s tax bill on an average home would increase by $272.

Meanwhile, a temporary compromise was struck before this quarter’s tax bills were sent out, with a $467 increase for the average home.

A smaller tax hike would be possible, in part, through spending cuts across all departments. and by slashing salaries by 15 percent for top earners.

Employees making between $10,000 and $25,999 a year would see only a 1 percent pay cut. Council members, who are paid $41,000 annually, would take a 15 percent cut.

The salary cuts should save about $7 million and avoid more than 100 layoffs, said Councilman-at-Large Kenneth Morris, who, as finance chairman, drafted the amendment to the budget. Morris said the salary cuts would be paid back upon retirement.

Mayor Jeffery Jones has already submitted a plan to the state that calls for about 150 police layoffs.

His administration has so far brought the deficit down to $12 million, but mostly through a 29 percent tax hike.

Gov. Christie says he will restore N.J. property tax rebates

Gov. Chris Christie said today he will restore property tax rebates that were eliminated in the budget last year.

“We’re going to reinstitute the rebate this spring and you’re going to get it quarterly as a credit on your property tax bill,” Christie said at a town hall meeting.

Christie said the rebates will not come as an annual check, as it did in previous incarnations.

Christie said the October checks cost the state money to print and mail. He also said that the state had to borrow and pay interest on the rebates because they were made during the fall.

Beginning in the second quarter of this calendar year, Christie said taxpayers eligible for rebates will see a reduction in the property tax bills. Christie said as the 2 percent property tax cap takes effect, his office will also try to offset additional increases.

“We’re looking for a way to increase the amount we give each quarter,” Christie said. “When this year’s budget coming up we’re going to see if we can expand the program further to try to give people some relief as we expand this 2 percent cap.”