Enough is enough: It’s time for New Jersey’s leaders, at every level of government, to solve our property tax crisis.
New Jersey’s property taxes are the highest in the nation, and in a state with the fifth-highest tax burden in the country, the $29 billion collected each year in property taxes by counties, municipalities and school districts is more than the state government collects in income, sales taxes, gas and corporation income taxes combined.
Even with a 2 percent property tax cap in place, high property taxes make New Jersey unaffordable for too many residents. Too many senior citizens on fixed incomes can’t afford to stay in their homes, even if they have paid off their mortgage. Too many young people can’t afford to buy their own homes because they can’t afford the property taxes on top of their mortgage payments.
And too many businesses think twice about moving here not only because of the property taxes they will have to pay on their offices, but also because they will have to pay their workers so much more to cover living costs.
It’s not just that we have about 600 school districts and 565 municipalities, but that almost all of them have their own school superintendents, business administrators, health officers, tax assessors, and on and on and on.
Defenders of the status quo say people like it that way. They invoke “home rule” as an excuse or say, “It won’t save enough money to make it worthwhile.”
But it is in the best interests of all of us to make New Jersey competitive and affordable, and the best way to do that is to find cost savings and service efficiencies wherever we can at every level of government.
That has been my mantra in my first year in the state Senate, and it was the conclusion of a bipartisan, blue-ribbon task force of economists, fiscal policy experts, academics and legislators put together by Senate President Steve Sweeney to find ways out of the deep fiscal crisis our state is facing.
The Economic and Fiscal Policy Workgroup’s recommendations for pension and benefit reform would produce billions of dollars in long-term savings both for the state budget and on county, municipal and school property taxes.
But if we are going to make New Jersey affordable and competitive into the future, we need to focus on providing government services in the most efficient and cost-effective ways possible at the local level. Why? Because 70 percent of all state and local tax dollars go into school districts, counties and municipalities either directly as property taxes or as state aid, including the lion’s share of state income taxes.
One of the smartest ways to provide property tax savings is to regionalize services where we can save tax dollars while providing equal or better service.
Let’s start with school regionalization. On average, more than 50 percent of every property tax bill goes into funding education from preschool to 12th grade. New Jersey students score second only to Massachusetts on national standardized exams, and the quality of our schools is one of our best selling points as a state.
But we can do better and at a lower cost. Too often, our K-4, K-6 and K-8 school districts do not coordinate curriculum or teaching methods, textbooks or specialized services with the regional high school districts their children will be attending, so 7th and 9th graders arrive with different skill sets.
Furthermore, a recent analysis showed that the 120 K-4 to K-8 school districts with 480 or fewer students spent 17 percent more on average — about $3,400 per child — than the 360 districts with more than 1,000 students.
Clearly, it makes sense on both an educational and a cost basis to move forward with K-12 regionalization plans that will create larger districts with the more diverse curriculum that students need heading into high school while saving on duplicative administrative and back-office operations.
More and more school districts are already sharing school superintendents and finding ways to cooperate to save money. Pinelands Regional avoided going out for a referendum to build an addition because its largest sending district, the K-6 Little Egg Harbor district, offered to take its 7th graders into its excess classroom space. The following year, when the superintendent of the 7-12 Pinelands district left, the Little Egg Harbor school board urged its superintendent, Melissa McCooley, to apply for the job as a shared superintendent. She got the job — after telling Pinelands she would only do it if she could supervise both districts.
Wouldn’t it make sense for Pinelands and Little Egg Harbor to merge into a single district the tiny K-6 sending districts of Tuckerton, Eagleswood and Bass River – which together have one-sixth as many students as the Pinelands and Little Egg Harbor districts that McCooley already oversees?
Full K-12 regionalization would cut the number of school districts — and duplicative administrations — from over 600 to about 320. There are numerous details to work out, including how to provide a range of options to enable districts to share costs equitably, but it is where we need to go. Another option for smaller rural counties like Salem and Warren is to create countywide districts along the Maryland model.
While the educational case and the cost data on small vs. larger school districts are irrefutable, studies of municipal costs based on size are more mixed. I have introduced legislation to require the 32 smallest municipalities with less than 1,000 population to merge because I believe they are simply too small to be cost-efficient, but the answer for most municipalities — and the real cost savings – is to be found through greater regionalization, particularly at the county level.
Last month, Gov. Phil Murphy signed into law my legislation making Monmouth and Atlantic the sixth and seventh counties in the state to qualify under the Common Sense Shared Services Pilot Act to make it easier for municipalities to share municipal clerks, treasurers, assessors, tax collectors, chief financial officers, municipal court clerks or superintendents of public works.
It was particularly appropriate to add Monmouth to that mix because Monmouth may be the only county in the state that has a full-time shared service coordinator. Bergen, Camden and Hunterdon counties, for example, have shared services coordinators with other responsibilities.
Our shared services coordinator is available to Monmouth’s 53 municipalities to provide advice and recommendations on structuring shared services agreements. For local mayors, being able to go to a county official who knows their municipality and their particular needs is much better than having to go to a central state office or agency.
Among the regional services that Monmouth offers its municipalities are shared 911 and emergency dispatch services, an Open Public Records Search/Records Information Management system, and a Commodity Resale Program/County Purchasing Coop for fuel, road salt and other public works needs.
One of the key recommendations of the blue-ribbon Economic and Fiscal Policy Workgroup, in fact, is to undertake a series of studies of services like tax assessment, health services, construction code enforcement and 911 call-taking and dispatch to determine the appropriate size of the population needed to deliver cost-effective and efficient services. This would parallel the work of the Administrative Office of the Courts, which has studied caseloads of municipal courts and recommended that those with caseloads below a certain size consider merging with other courts.
There are many ways to provide shared services. North Hudson Fire and Rescue, for example, was created in the late 1990s to provide fire and first aid services to five cities and has been a tremendous success, as has the countywide ambulance service created in Gloucester County that is providing faster response times with fewer ambulances at less cost.
As with K-12 regionalization, we are working in the Legislature on a bipartisan basis to remove the barriers to shared services and to encourage regionalization initiatives that promote efficiency and save tax dollars.
But the real impetus for change has to come at the local level, from municipal and county officials as well as school superintendents, board members, parents and taxpayers who are willing to push for the changes we need to make life in New Jersey better and more affordable.
State Sen. Vin Gopal, D-Monmouth, represents the 11th Legislative District and serves as Senate Majority Conference Leader.
See the article on the Asbury Park Press site here.