In these challenging economic times, every home owner wants to make sure their property taxes are as low as possible and are put to use where they can do the most good. Nowhere is this more necessary than in New Jersey, where it is imperative that all levels of government do not waste our scarce financial resources and cut taxes particularly property taxes.
Perhaps the most effective way to cut property taxes in New Jersey is to eliminate the tax burden imposed by county government. The three New Jersey counties of Union, Essex and Bergen together levy approximately $1.7 billion in annual property taxes. While states such as Connecticut eliminated county government in the 1960’s and, therefore, its home owners are free of county property taxes, all 21 of New Jersey’s counties combine to collect approximately $6.0 billion in property taxes annually.
Union County, for example, spends approximately $450 million annually, of which the City of Summit pays $26.4 million in property taxes or approximately 24% of every property tax dollar in Summit. But the City of Summit receives less than ten cents for every dollar of County services in return. In addition, the County percentage is artificially low because the Freeholders took another pension payment holiday. While almost all of Summit’s property tax payment to Union County is redistributed to other towns within the county, the property tax dollars for Summit’s schools stay in Summit and help to support local property values. If we can significantly reduce or ultimately eliminate county government to significantly lower our property tax burden, then the value of every New Jersey home owner’s principal asset, his/her home, will rise correspondingly.
New Jersey taxpayers must be vigilant in regard to any potential risks to their homes and businesses such as the unnecessary tax burden of county government and the degradation of the quality of education in their local schools. In addition, the credit rating of every municipal government depends largely upon the quality and financial soundness of its local schools. Therefore, significant risks to the quality and funding of a municipality’s local public schools or its disproportionately high level of county property taxes would most likely adversely impact its credit rating and increase its debt service expense as a result. Taxpayers must work together to counteract these risks because these risks can not be diversified.