Due to the major property damage caused by Hurricane Sandy, many are faced with value assessments that are no longer accurate. Even though this may not affect you directly, please feel free to pass this information along to friends, families, and neighbors that may find this useful.
Under current State law, property value is assessed based on the condition of the lot and the buildings as of October 1st for the following tax year. In other words, the 2013 property tax bills are based on the value of the property as of October 1st, 2012
However, State law contains a provision which states that a property with a building or other structure that has been destroyed by a storm between October 1st and December 31st can have assessment reduced to reflect the depreciation in value for that property. The landowner must provide the assessor with notice prior to January 10, 2013. The assessor must then base the assessed value of the property according to its condition as of January 1, 2013.
Only 9 weeks remain to provide this notice to municipal assessors.
As for the November 1st property tax bill (fourth quarter 2012), a property taxpayer must pay that bill in full by November 10th to pay the fourth quarter bill. Also, a municipality may pass a resolution that establishes a zero percent interest rate for tax payments made after November 10th.
Governor Chris Christie took his Endless Summer tax relief tour to Long Beach Island this afternoon.
About half way through this APP video the governor addresses municipal consolidation incentives as a method the state is providing to reduce property taxes. Chrisite is laugh out loud funny in mimicking public opposition to consoldiations.
The bill, S589, that Senator Jennifer Beck and Senate President Steve Sweeney have sponsored to address New Jersey’s “Fake Farms” will not close any fake farms and will not increase property tax revenues. It will create new bureaucracy on the state, county and municipal levels of government. It will increase the costs of municipalities evaluating what is a farm and what is not a farm.
New Jersey’s farmland assessment law dates back to 1964. It provides that properties of 5 acres that generate revenue and payments of $500 from crops or livestock be assessed as farms for property tax purposes. Properties over 5 acres must produce $5 per acre to qualify under the proposed law. $.50 per acre for wetlands. Dogs are excluded as livestock, President Obama’s childhood dietary habits notwithstanding.
S589, let’s call it “Karcher’s Law,” would increase the minimum level of revenue a “farm” must produce to $1000.
Beck used former Senator Ellen Karcher’s use of the farmland assessment law as a major issue in her 2007 campaign to replace Karcher in the Senate. Karcher classifies 6 acres of her 9 acre Marlboro home as a Christmas tree farm, saving $14,000 in property taxes.
I can see the campaign literature now. “We ended fake farms by doubling the required production of these so called farms.” Gullible homeowners will nod and be grateful that their property taxes increased only 3% while the lawyers, lobbyists, rock stars and politicians who avoid tens of thousands in property taxes send in their campaign contributions.
Products that cost $500 in 1964 would cost $3,711.05 today. 500 of today’s dollars would have bought you $67.37 of merchandise in 1964.
Clearly, increasing the required revenue generated from a “farm” from $500 to $1000 will not end the abuse. Increasing the required revenue to the inflation adjusted $3,711.05 will not end it either.
There is a provision in the proposed law that creates a State Farmland Evaluation Advisory Committee comprised of the Director of the Division of Taxation, the Dean of Rutgers College of Agriculture and the Secretary of Agriculture. The committee will conduct periodic reviews of the minimum farm revenue and payment requirements. Maybe Sweeney and Beck are counting on the bureaucrats to come up with an equitable solution to the problem. Not likely, but we can’t say for sure as neither Senator returned a call asking for an explanation of the bill.
There is another provision of the proposed bill that eliminates the “roll back tax” for fake farms that are declassified. Under the current farmland assessment law, properties that are declassified as farms are subject to retroactive property taxes at a fair market valuation for a number of years. The proposed law would only tax declassified farms at fair market value going forward, so long as the property owner continues their fake farming. Maybe this is the real intended teeth of the proposed bill. We’ll ask Beck or Sweeney if either of them calls back.
S589 was passed by the Senate Environment and Energy Committee on Thursday and sent to the Senate Budget and Appropriations Committee.
Hopefully the Senate Budget and Appropriation Committee, of which Beck is a member, will amend the bill so that it really does eliminate the practice of middle class homeowners subsidizing hobby farms of wealthy and connected landowners.
The Editorial Board of the Monmouth and Ocean Counties paper of record actually met with local mayors! Call that progress. MMM criticised the APP editorial board last month for sitting down with Newark Mayor Cory Booker for no reason other than to boost Booker’s statewide name ID when they, until yesterday, hardly, if ever, meet with local mayors.
Middletown Mayor Tony Fiore and Long Branch Mayor Adam Schneider met with the Neptune Nudniks on Wednesday, at the behest of the League of Municipalities. The mayors’ purpose was to bring attention to the State’s decades old practice of keeping the energy receipts tax that public utilities pay.
In energy receipts tax has been in existence for decades. It was originally set up in lieu of property taxes to compensate municipalities for the utility infrastructure rights of way. The tax used to be broken out on your utility bill. It was paid by the utilities directly to the municipalities.
In 2002, during the McGreevey administration, the State started collecting to tax. We all know what happens to money when to goes to the black whole of Trenton for redistribution. Much of it disappears and the intended recipients get shafted. Think Unemployment Insurance Fund and Transportation Trust Fund.
Fiore told MMM that the League sued McGreevey to get the money but the State just turned around a reduced State Aid by a commensurate amount.
Fiore, Schneider and the League now want that money back. It’s not coming, according to what State Treasurer Andrew Sidamon-Eristoff told the APP, “At this time we do not have the financial flexibility to make discretionary adjustment” to provide more from energy taxes.
Fiore told MMM that the energy receipts tax would have provided $4 million dollars to Middletown Township in 2011. That would have saved the Library surplus the Township relied on, prevented layoffs and cleaned up a few snow storms.
What burns Fiore is not just the $4 million that Middletown didn’t collect from the utilities. It’s the $1.5 million hit the Township continues to take in reduced State Aid from 2009 levels. “We wouldn’t be increasing property taxes 1.97% this year if our Aid was restored,” said Fiore, “give us our $1.5 million back and I can reduce taxes by 2%. The Board of Education got all of their Aid restored, yet they are still raising taxes.”
Schneider told the APP that not receiving the energy receipts tax is costing Long Branch “several million dollars.”
55% of New Jersey registered voters approve of Governor Chris Christie’s job performance. 37% disapprove. Among men Christie has a 17% net positive rating. Among women, net positive 6%
While still upside down, the state legislature’s ratings have improved. 39% disapprove of the legislature, the best rating they have had since 2007. 56% disapproved in April of 2010. The legislature’s approval rating remained steady at 35%. Murray didn’t say so, but it would stand to reason that voters feel better about the legislature due to Christie promoting how they have compromised with him.
Property taxes remain the most pressing concern of New Jersey residents. Murray asked respondents to rank Trenton’s priorties on a 1-10 scale:
New Jersey‘s Pressing Issues
(rated on a 10 point scale)
Tier 1:
8.9 Reducing property taxes
Tier 2:
7.7 Reducing income taxes
7.6 Increasing minimum wage
7.4 Reforming teacher tenure
7.3 Raising millionaires tax
Tier 3:
7.0 Reforming drug sentencing laws
6.7 Restructuring higher education
Tier 4:
5.8 Expanding charter schools
5.1 Same sex marriage
While same sex marriage is a low priority for New Jersey residents, 52% now favor allowing same sex couples to marry compared to 34% who oppose. For the first time since the question has been polled, residents who strongly favor same sex marriage exceed residents who strongly oppose by a 32% to 25% margin.
The poll, including data tables and Murray’s write up can be found here.
In a column published in The Star Ledger and at NJ Spotlight, Mark Magyar says no. Magyar says that like all the governors before him, except Florio, Christie is simply tinkering at the margins and that whether Christie serves one term or two, New Jersey’s property taxes will still be the highest in the nation.
Magyar, who was a policy advisor to Chris Daggett’s Independent gubernatorial campaign against Christie and Jon Corzine, makes the case that unless New Jersey increases income taxes and sales taxes with the State taking over a higher burden of education funding, that property taxes will continue to be a dispropotionate and inequitable source of funding for education and government services.
A good tax system is generally considered to be one in which income, property and sales taxes are in some rough balance, with each providing somewhere between 30 percent and 40 percent of total revenue for these three major taxes. That is the case in most states, but it is not the case in New Jersey, where property taxes actually make up 58 percent of the income/property/sales tax pie, with income taxes accounting for just 24 percent and sales for the remaining 18 percent.
The only way to actually lower property taxes in New Jersey to a competitive level with other states is to shift billions of dollars of the cost of K-12 education or municipal or county services to another major tax or taxes — with the income and sales taxes being the most logical choices — while simultaneously making sure that an effective cap prevents any new increase in school district and local government spending.
That is what Democratic Gov. Jim Florio tried to do in 1990 when he dedicated half of his $2.8 billion tax package to property tax relief, but most of the money was quickly eaten up by school districts and municipalities for new spending, and by the second year property taxes were rising again as rapidly as ever. Voter repudiation of Florio led to the election of a Republican legislature and GOP Gov. Christie Whitman, and scared politicians in both parties away from any meaningful attempt at overall tax reform.
However, Magyar’s argument is a non-sequitur to the current debate happening in Trenton (and nationally).
Even if Christie and the legislature were to institute Steve Lonegan’s flat tax, increasing income taxes on the poor and middle class while reducing them on the rich, and even if they instituted Chris Daggett’s $4 billion sales tax increase, and used the new revenue to reduce property taxes, the problems that Christie is addressing would remain. They would just be paid for differently.
New Jersey, and many other states, has too much government. There are too many government employees making too much money and getting benefits that are too generous to sustain regardless of how the revenue is generated.
It is only by reducing the size of government on all levels, which means less government employees making less money with less generous pensions and benefits, that our overall tax burden will decrease. That is what Christie’s reforms are designed to do. By forcing the downsizing within the current system, rather than radically changing the way New Jersey taxes its citizens and then implementing cuts, Christie is demanding that municipal, county governments and school boards make the hard choices now. If Christie did it Magyar’s way, government and taxes would continue to expand.
Let’s first reduce the size of our governments. Once that is done we can address the way we pay for them.
Lastly, it’s important to note here as well, that this is the product of compromise. Now, compromise can be reached in a variety of different ways, through a variety of different paths, but I want to thank the Senate President and the Speaker and the Minority Leader of the Senate and of the Assembly for traveling on this journey to the compromise with me. It is extraordinarily important that we all stand up for the principles we believe in, but also recognize that we are sent here to get the work done that the people have sent us here to do. Mayors, council people, have been crying out for this reform for a long time. And I suspect that if myself, the Speaker, and the Senate President along with the minority leaders had told you back in January of 2010 that by December of 2011, we would have a 2% hard cap on property tax levies, and a 2% hard cap on interest arbitration awards, you probably would have told us we were crazy. This is the product of people standing up for their principles, listening to the people who voted for us, and compromise where compromise is needed. The last part which I forgot, is this mirrors the 2% levy cap in respect that pension and healthcare benefits are excluded from the cap. However, the other commitment that we have made to each other and all of this have said this repeatedly over time, is that when we return in January to our work that we are going to get pension and health benefit reform benefit done. Each one of these things is a building block to finally controlling property taxes in New Jersey. We’ve got the levy cap, we’re dealing with interest arbitration, we have some other tool kit items that we’re going to have to turn to as well and then we’re going to turn to pension and health benefits as well. We’ve made that commitment to each other both privately and publically. So again, I thank the leaders of the Legislature for their willingness to work with me, their willingness to compromise, and to come to an agreement that makes sense for the people in the state. There’s nothing more important than getting property taxes under control in this state and changing the system. And I think for the first time in a long time, we have taken meaningful steps towards doing that.
