Christie’s property tax break meets with skepticism

LAWRENCE – Gov. Chris Christie put overhauling the state’s debt-laden public pension system at the heart of his budget address this week. But there was one area he did not mention: property taxes.

It was a surprising omission if only because New Jersey’s property taxes are higher than any other state’s, with the average property owner paying $8,161 in taxes in 2014, according to state figures.

Christie, who could decide to run for the White House, may not have focused on the issue in his speech, but his $33.8 billion budget does. It provides a 5.2 percent increase over the previous fiscal year for property tax relief, including $800 million in school aid, and it boasts $1.1 billion in direct property taxpayer relief programs.

But while that relief might translate into more money in some taxpayers’ pockets, it does very little to slash the state’s highest-in-the-country property taxes, say both progressive and conservative budget watchers.

That’s because municipalities and school districts that set property taxes have seen commercial property owners successfully lobby for lower rates because of falling vacancies, said Gordon MacInnes, president of the left-leaning think tank New Jersey Policy Perspective. Most property tax owners can’t win favorable reassessments like the owner of a commercial property whose vacancy rate increased from 10 percent to 40 percent, he said. And most towns and school districts aren’t cutting services to accommodate the changes, he added.

“It means that there’s no relief,” he said.

The school funding formula that results in 60 percent of state education aid going to only a small fraction of school districts is the main driver of high property taxes, said Mike Proto, a spokesman for the conservative Americans for Prosperity group in New Jersey.

“As far as property taxes in New Jersey are concerned, nothing’s going to change until we get our arms around this school funding issue,” he said. “Unless the Legislature decides to take action and get more control of school funding dollars, property tax payers are going to be hard-pressed to get any relief.”

MacInnes said he is pessimistic about lawmakers and Christie taking action on property taxes because pension relief and the state’s troubled transportation trust fund are taking center stage.

“Property taxes right now are off the agenda for the governor and for the Legislature,” he said. “The numbers you’re talking about are so big. To make a dent in them — what the state would have to pony up is so great — and here we are we can’t make our pension payments or pay for the transportation trust fund.”

Christie touts the 2 percent property tax cap he and lawmakers enacted in 2010. Just this week on his monthly radio call-in show he praised the law. But in reality, because of exemptions, rates climb above the cap.

It’s something that property tax payers noticed.

Paul Cohn, 64, a retired New Jersey Transportation Department employee, says the state’s high property taxes result from its many layers of municipal government. But he’s been skeptical of Christie’s and the Legislature’s attempts at capping taxes.

“It’s been smoke and mirrors,” he said.

Average New Jersey property tax rates

2014: $8,161

2013: $7,988

2012: $7,885

2011: $7,759

2010: $7,576

Source: New Jersey Department of Community Affairs