BUSINESS & ECONOMY

Rutgers Assistant Director: Many Factors Cause High NJ Property Taxes

Property taxes in New Jersey are up. Again. This year by an average 2.2 percent to $8,161. People in Essex, Bergen and Union counties pay the most, but residents of Hudson County really got slammed. Property taxes there climbed more than 7.5 percent. Why? Rutgers University Assistant Director of the Bloustein Local Government Research Center Marc Pfeiffer has the answers. He told NJTV News Anchor Mary Alice Williams that a combination of factors have caused high property taxes.

“There is no single factor. It’s a combination of factors and things that have conspired over time,” said Pfeiffer. “And when I say over time, we’re talking over decades that have gotten us to where we are today. It is the highest density. We are the most densely populated state in the country and that adds a lot of cost to what we have when you compare us to other states. We have the four mostly densely populated cities in the country, are in Hudson County for example.”

Pfeiffer said New Jersey has a public employment environment where public employees have successfully negotiated under a state legislated negotiation regime that has resulted in increases that have exceeded what normally happens in the private sector, which has been hard to deal with over time.

When asked if he was blaming the pension system, Pfeiffer said no.

“It’s not just the pension system. It’s our environment under which public employees have achieved benefits and I have to admit I’ve retired one of those,” he said. “The pension and benefit system that has conspired over time to provide benefits that significantly exceed what most people get in the private sector and there’s a lot of people that resent that in a sense.”

While many argue that New Jersey has too many municipalities and that consolidation would alleviate the property tax burden, Pfeiffer calls that folk mythology and says consolidation would not help. He said that a study had been done last year that looked at per capita costs of municipalities based on their population in 2011. He said that the study showed the per capita cost varied only between $100 to $150 per person and the higher costs were with larger municipalities.

On how the the public’s expectations of municipal services run counter to lowering property taxes, Pfeiffer said that it’s a crisis of confidence that the public has or doesn’t have in elected and appointed officials and government in general.

“We’ve had unfortunately some bad decisions that have been made over the years that have caused property taxes and local government costs that drive them to go up,” he said. “One of them for example is on the school side. Roughly 55 percent of property taxes go toward public schools and the rest is divided between municipalities and county government. We now spend less than the national average on how much state aid goes back to public schools, so we see a significant piece there. Public expects more services, they expect better education. All those things cost money and property tax is the primary way municipalities have to raise the cost to pay for those services.”