N.J. property taxes increase 7 percent in 2010 | State | NewJerseyNewsroom.com -- Your State. Your News.


Jun 02nd
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N.J. property taxes increase 7 percent in 2010

NJDollars-optBY BOB HOLT

People have been leaving New Jersey in droves in recent years, and the numbers say that local taxes just rose 7 percent for 2010.

Coincidence? Why am I thinking no?

A Star-Ledger report on taxation around New Jersey showed the local tax rate increase. Fewer than a quarter of New Jersey towns had increases of less than 2 percent.

Deborah Howlett, president of New Jersey Policy Perspective, said for years residents were willing to put up with higher living costs in favor of more generous local services. But now, faced with this economy, residents are fed up with their property tax bills, consistently among the highest in the nation.

NJ.com reports a previous Star-Ledger story published earlier this month found that last year the average property tax bill, including county and school taxes, was $7,555, a jump of more than $274 from the previous year, based on taxation figures collected by the counties and reported to the state.

The same analysis found that more than 100 municipalities saw double-digit increases in local taxes, and more than half increased local levies by 5 percent or more.

The Asbury Park Press reported for 2009, the nonprofit Washington-based Tax Foundation ranked New Jersey No. 1 among the 50 states for having the highest combined average state and local tax burden on residents.

New Jerseyans contribute 11.8 percent of their income toward just state and local taxes each year — about $6,610 per person. Pennsylvanians pay 10.2 percent — 11th highest in the nation. Alaskans face the lowest state and local tax burden — just 6.4 percent of their income.

According to the Tax Foundation, New Jersey consistently ranks highest in the nation for property-tax burdens (now averaging $7,544 per household).

The executive director of the New Jersey League of Municipalities, William Dressel, endorsed the need for towns to share services. But he also called on state lawmakers to address other costs that are largely responsible for tax increases. Major municipal expenditures — including pension costs, health benefits and debt payments — are exempt from the new tax limit, exclusions that leave the door open for future hikes, Dressel said. The loopholes ensure, he said, that sharing services alone won't allow towns to save enough.

Last year, nearly a third of all municipalities used exceptions that were written into the former 4 percent cap law to avoid that limit.

Still, without getting control of the larger problems that cause the cost of health and pension benefits to soar, or student enrollment to surge, those expenses will continue to burden taxpayers regardless of the size of the cap in place. Local governments that participate in the state's health-care plan learned last week that the cost of benefits will go up 12 percent for towns and 6 percent for school boards, well over — and exempt from — the 2 percent cap.

Last July NorthJersey.com reported that Democratic lawmakers credit the 4 percent cap enacted in 2007 for shrinking annual statewide property tax increases that averaged 7 percent in the mid-2000s to 3.3 and 3.7 percent in 2009 and 2008. But those gains came as state government was boosting aid to schools, which make up the biggest slice of the local property tax bill.


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