Area property taxes rank high

The property tax burden falls on area homeowners more heavily than almost anywhere else in the nation.

In fewer than 2 percent of counties in the U.S. do property taxes take a bigger bite out of homeowners' incomes than they do in Atlantic County.

The chief reason is that, as reported earlier this week, New Jersey has the highest property taxes in the nation, according to the Tax Foundation in Washington, D.C. And in southern New Jersey, incomes are significantly lower than in the northern part of the state.

So while area residents can at least be glad that their taxes are not as high as in northern New Jersey - which has six counties among the top 10 most taxed in the nation - relatively high property taxes locally consume a big share of income.

Atlantic County, for example, has the 15th highest property tax burden out of 776 U.S. counties with populations of at least 65,000, according to the Tax Foundation. The median county homeowner must pay 6.8 percent of annual income to cover property tax.

All of the region's counties are in the top 15 percent - and most much higher - for property taxes paid and percentage of income required to pay the taxes.

Sandy Cistone has more experience with property taxes than she would like, having moved over the years from Sea Isle City to Pennsville Township, Salem County and recently to Upper Township.

She is trying to sell her Pennsville house, but it's a tough market and property taxes on it are $10,000 per year, she said. Cistone is painfully aware how property taxes have increased and remembers paying just $2,700 for her oceanfront home in Sea Isle in 2000.

"The taxes are outrageous," Cistone said Friday. "I've lived in Pennsylvania and Virginia and never had taxes as high as in New Jersey."

What we get

Having led the nation for several years in property taxes paid, New Jersey residents are familiar with what they're spending.

What they get for their money is more complicated, starting with lots of local government - 1,635 local governing bodies at last count. As Superior Court Judge Nelson Johnson pointed out in a recent op-ed essay, "New Jersey has more school districts (605) than New York, Connecticut and Pennsylvania combined."

The worth of such a fragmented government is much disputed, but the value of what is bought with most of property taxes is not: education.

"The evidence shows that when you compare New Jersey to other states, we're near the top in everything," Steve Baker, spokesman for the New Jersey Education Association, said Friday. "A lot of that is because we've committed the resources to public education."

True enough, in the most recent (2007) figures from the federal National Center for Education Statistics, New Jersey eighth-graders were first in the nation in writing, fourth in reading and sixth in math. Fourth-graders were second in both reading and math (to Massachusetts, a state also known for its high taxes).

States with the lowest property taxes - Louisiana, Alabama, West Virginia, Mississippi and Arkansas - all scored below the median on national standardized school tests.

Baker said the state teachers union would like to "rebalance taxes so more comes from the state and less from property taxes." And it supports making the education system more efficient, as long as that does not decrease opportunities for students.

Asked why teachers are demanding and largely getting raises this year that are about three times those in the private sector and well above the inflation rate, Baker said those raises are nonetheless "somewhat lower than in recent years."

"We understand these are difficult times, but our members are impacted by the recession as well," he said. "Without wanting to seem insensitive, when the economy was booming and the stock market was up, nobody was saying, 'We'd like to reopen your contracts and double your raises.'"

Seniors burdened, helped

Another group with a large stake in the property tax issue is senior citizens, whose incomes generally don't rise as rapidly as the taxes.

Their children grown, some seniors chafe at having to pay taxes mainly to educate the children of others.

Unlike other groups, however, seniors have gotten significant property-tax relief from the state.

A freeze on senior property taxes was enacted in 1998 and then income limits for freeze eligibility were relaxed last year. And while property-tax rebates were dropped for most homeowners to help balance the state budget this year, they were retained for senior citizens.

Douglas Johnston, governmental affairs manager for the state AARP, said property taxes are the No. 1 issue in the state for its members and the senior citizen organization has fought hard to win and keep property-tax relief for seniors.

"While it's true that we have the highest property taxes in the nation, we also have the most generous property-tax relief and rebate program in the country," Johnston said Friday.

The AARP would like to go further, he said.

"The core problem with property taxes is they are not based on your ability to pay, whereas sales taxes are based on how much you consume and income taxes on how much you make," Johnston said. "Something needs to be done to link property taxes to how much you make."

That something, however, would likely increase the taxes of others.

According to the Tax Foundation, a nonprofit and nonpartisan organization in Washington that tracks taxes, such efforts to narrow who is subject to a tax are a key contributor to raising taxes for those left to pay.

A good tax

Gerald Prante, an economist with the Tax Foundation, said the best taxes are those that are broad-based and neutral - ones that "don't try to cherry pick winners and losers."

From the foundation's point of view, he said, taxing property is a pretty good method for raising needed money.

"People don't like the tax, and it's politically unpopular, but it's a good tax for local governments to do," Prante said.

For starters, it's easy to administer. The tax base is relatively stable and assessments don't need to be done very often, he said.

Local property taxes also give residents a degree of choice regarding taxes and benefits, something they lose as the revenue source shifts to the state level in the form of income or sales taxes.

"Right now, you can move to a neighboring district if you wish," he said, and thereby pay less tax or pay more and get better schools. "If the tax was from the state level, that choice would be diminished."

Prante pointed to the example of California, whose Proposition 13 lowered property taxes significantly. The state still has among the highest tax burdens overall now because sales and income taxes were raised to make up the difference.

In the end, the essence of taxes is the same as any form of consumer spending.

"The reason New Jersey and the Northeast have higher taxes is that they spend a lot on government services," he said. "You have to pay for what you get."

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