From the Vineland Daily Journal:
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.
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.
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.”
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.
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.
“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.”