Rates of Return

Been thinking about the property tax revenue breakdown shared by Deputy Tax Assessor Eugene Flaherty the other night – 13.5% to Somerset County, 60% to the schools, 27% to the Borough.

[First off, a disclaimer of sorts - I like to be right about things, but I also really like to be proved wrong about things, especially when the things are disappointing provisional conclusions I've reached about the world and how it works.]

Now to the meat and potatoes.

The current combined assessed value of all Borough property is $844,299,283, and the current property tax rate is 5.52 per $100,000 of assessed value.

So this year, the Borough raised about $46,605,320 from property tax payments made by residents.

We discuss a lot about the municipal part of the budget, and here’s another reminder that the annual public hearing on the proposed budget is next Monday, April 14, at 7:30 p.m., at the Vermeule Community Center.

But let’s look at the other pieces of the pie.

COUNTY

13.5% of the tax revenue raised last year went to the County: $6,291,718

Did North Plainfield get back roughly $6.3 million in county goods and services?

Or are North Plainfield taxpayers basically subsidizing better quality of life for residents of other, less densely-populated Somerset County municipalities?

My guess is the latter – I don’t see much evidence of Somerset County investment in North Plainfield’s infrastucture, services and open space programs. They pay the librarians’ salaries and buy new books and other library materials – an extremely important local service. They repaved and added a light at the Mountain Avenue-Somerset intersection this year, and occasionally toss $20,000 or so for planning-studies-to-nowhere.

But my impression, based on observations and conversations with other residents over the past year, is that Mayor Allen (an extremely partisan Democrat) doesn’t like to work with the County government (largely Republican) and she isn’t particularly adept at applying for and spending money the County does invest here, which in turn makes the County decision-makers hesitate to throw good money after bad.

If there’s evidence to disprove this hypothesis, send it on in, especially if there’s some sort of annual statement of County goods and services provided to the Borough’s residents.

SCHOOL FUNDING

The school budget eats up another 60% of the tax revenues: roughly $27,963,192.

Across the state, and across party lines, there’s a fairly vigorous movement to change the way schools are funded in New Jersey, to move away from property taxes and toward some hopefully more equitable formula. That movement has probably hit a giant setback what with the Corzine austerity budget, but the organizational networks are probably still intact.

Has Mayor Janice Allen ever joined with other Mayors and municipal officials to travel to Trenton to advocate and lobby for a new school funding formula? If so, when has she done that, with what group(s), and what was the particular alternative school funding plan that she threw her political support behind?

If not, why not?

Here’s an overview report on the property tax-school funding nexus in several different states.

Here’s a 2006 polling study on New Jerseyan’s opinions about school funding and property taxes. (I only skimmed it, but I read a section that said majorities of residents don’t want taxes reduced by cutting school programs, but by streamlining administrative functions and merging districts wherever possible.)

And here’s a link to the NJ League of Municipalities overview of property tax issues in the state: we rank second in the nation for reliance on property taxes, behind only New Hampshire. Here’s a telling quote:

In New Jersey, property taxes account for about 98% of all locally collected revenues. The National average is about 73%. And in our State, those with the least shoulder a disproportionate share of the burden. Households with incomes in the lowest 20 % pay 9.2% of their earnings in property taxes, while the wealthiest 20 % pay 3.6% of their income through this assessment.

One last thought, on reading that NJ League of Municipalities overview – property taxes are another area in which the State has usurped local authority by removing revenue streams from municipalities while increasing unfunded mandates. That’s precisely the power usurpation by the State that the Self-Governance Ordinance would have stopped, by reclaiming power for local decision-makers.

Yet regular readers will clearly recall that the local decision-makers were the most vigorous opponents of the measure proposed by NPCCR for public consideration and adoption during the first People v. State skirmish last summer, fall and winter. Wacky.

The People lost that round, but we’re still kicking. And one possibility for a revised go-round might be to rewrite the Ordinance to add local control over some of these budgetary decision-making issues.

Looking forward to reader thoughts on this subject, and reader suggestions for other informative links.