October 18, 2006
New Jersey Homeowner Property Tax Voodoo
About 34 states let communities charge developers impact fees that partially help pay for costs associated with new construction. Since most new homeowners have kids (about one-third of households have children and although households with own children under 18 years of age dropped from 45 % of all households in 1970 to 35% in 1990, and 32% in 2003) who cost about $9,000 per year to educate in state monopoly schools.
The impact fees hardly cover the added financial burden. However, parsing the downward trend one would think that the school cost portion for a community would be decreasing amount. So much for "economies of scale economics" when a government monopoly is in control.
New Jersey has just raised their sales tax to 7%. Meanwhile the tax and spend orgy continues. New Jersey politicians on both sides of the aisle are notorious for dreaming up new projects that cost taxpayers dearly. They make magic by deferring expenses floating bonds and meanwhile bloat state payrolls and entitlement. Thirty-five states have local sales taxes but few as high as New Jersey.
Assemblyman Louis Manzo is reported sayings that the state could slash school property taxes in half, in part, with a 15 percent income tax surcharge. Lawmakers are considering raising the income tax and allow local governments to charge taxes to cut property taxes in New Jersey.
No politicians seem to have the courage to cut expenses and make inroads cutting the budget. Politicians promise the have-nots the rose garden that they wind up paying for by high sales tax, income taxes, higher rents since the landlords property taxes have increased. The rose garden is staffed by favorites and insiders. The have-nots get a temporary fix. In 20 years the insiders get a comfortable retirement at 75% pay while the have-nots need to work 45 years for a company whose pensions benefits may be in doubt.
We need a titanium cap on education spending and a cap on the state budget pegged at the rate of inflation. Lawmakers in New Jersey, it seems, would get around that too. With the cut and run away from economizing mentality in Trenton, they’d simply pass a law allowing them cost plus.
Filed under Blog, New Jersey by George Bolton


















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