Senator Weighs in on Property Tax, But Is Pessimistic of Quick Reform
This year, the average home-owner in Princeton Township will pay $2,864 in property taxes; in the Borough, that amount climbs to $3,159. Factor in costs related to financing the Princeton Regional School's $67 million operating cost and Princetonians are shouldering a hefty sum for 2005.
And so the story goes in New Jersey, where homeowners pay about twice the national average. In recent years, several state legislators, first somewhat effectively, then somewhat less effectively, have called for a constitutional convention that would re-evaluate the municipalities' property tax-heavy system of financing yearly expenditures. The common notion is that with 566 municipalities, the state's towns and cities are having increasing difficulty in sustaining themselves since towns often provide their residents with individualized services such as fire and police departments and it all happens at a price.
State Senator John Adler (D-6th District) addressed this concern Sunday evening at the Suzanne Patterson Center during an event sponsored by the Princeton Community Democratic Organization. Mr. Adler is the co-sponsor of the 2003 Senate Bill 478 that proposes a constitutional convention be held to allow New Jersey voters to decide whether and how the property tax system should be reformed.
The event was poorly attended. Only about 20 tax payers turned out to discuss an issue that has been the focal point in elections past and that, according to Township Committee candidate Vicky Bergman, is the issue most often mentioned when people are asked about their concerns. "It's a problem that folks in both Princetons feel, folks in Cherry Hill feel, and remarkably everywhere in New Jersey," Mr. Adler said, referring to the township in his own legislative district.
Mr. Adler said that when voters address the issue, they tend to place the blame on their mayors or governing bodies or school boards. And while that may partially be true, he said, the fault largely lies somewhere in the standard rate of inflation, and the pitfalls of what he feels is a flawed tax system.
For most New Jerseyans, he said, retirement income, social security, wages, and investments are not rising faster than the rate of inflation, while property taxes continue to exceed that rate. But for the most part, Mr. Adler said, the fault lies in the Legislature.
"If it were just Princeton's problem, you wouldn't say it's a statewide problem, except it's happening everywhere in the state."
And with the exception of one year out of 15 in the Legislature, the problem has "gotten worse and worse and worse," he said. Mr. Adler did not dodge the blame either, adding that the inaction displayed by the state government reflects on all elected officials.
"Everybody knows someone who's moved because of property taxes," Mr. Adler said, adding that the problem is "unique" to New Jersey, whose municipalities rely more on property taxes than any other "comparable" state in the country, in terms of population, demographic, and industry. "People in the Legislature get it, but don't want to do anything about it...and that's the worst part it: that they don't want to talk in serious terms about trying to solve the problem and trying to have the accommodation of additional revenues from the state coming back to the towns, school districts, and counties," Mr. Adler said.
Several years ago, the Assembly passed a proposal that eventually died in the Senate supporting a convention exploring other ways to translate state money to the municipalities, including increases in sales tax, a gas tax hike (an inevitability, said Mr. Adler), and the exploring of the "significant" amount of land that is not on the tax rolls in New Jersey a problem that lives in the heart of Princeton, literally.
Princeton University, the largest tax payer in the Borough and Township, paid $6.1 million in property and sewer tax in 2002-3 and $1.2 million in fees beyond those payments, and while some members of Borough Council are satisfied with the University's payment in lieu of taxes, and its contributions to the public school system, the problem doesn't just exist in Princeton. According to a December 2004 report by Donald A. Krueckeberg for the New Jersey Policy Perspective, about 13.5 percent paid no property tax of the $648.5 billion of total property value in New Jersey in 2000, mostly, the report said, because of state exemptions.
Mr. Adler did not call for tax-exempt institutions to start paying property taxes, but for a "systemic programmatic shift away from reliance on property tax." But getting there, he said, would be difficult.
The Senator, a Democrat whose district covers affluent Cherry Hill, but also poorer sections of Camden County, said that a major obstacle in getting support is the issue of the Abbott II ruling that requires per-pupil funding be equalized between New Jersey's urban districts and the most affluent suburban districts. Mr. Adler said that many of his colleagues would be interested in finding other means of municipal funding, if Abbott, mandated by the New Jersey Supreme Court, were not a factor.
"It's bad news for property taxpayers," Mr. Adler said. "Because it means we'll leave alone property taxes...and it's far and away the number one issue."