To help New Jerseyans better understand the relationship between the value of their homes, the property taxes they pay and the services they receive from local municipalities, school districts and counties, the Center for Urban Policy Research in collaboration with the Center of Government Services (CGS), both at Rutgers, has compiled a Local Public Finance Database.

Spurred by the long-running debate on property tax reform in New Jersey, the public database, which may be viewed here, is meant to help inform discussion on the important and vexing topic. 

The Center for Urban Policy Research and the Center of Government Services are units of the Edward J. Bloustein School of Planning and Public Policy at Rutgers.

The data were compiled from the New Jersey Department of Community Affairs – Division of Local Government Services; the New Jersey Department of Education; and U.S. Census sources. The principal authors of the database are David Listokin and Matthew Camp, researchers at the urban policy research center. “One of our charges is to further knowledge of local public finance in New Jersey,” said Listokin, the center’s co-director. “You can’t pick up a newspaper or turn on the TV or radio without encountering this complex issue that affects every New Jerseyan.”

The expandable database currently comprises eight tables:

• Property Tax Base, Value, Levy, Rate and Rebate (2005)

• Selected Local Revenue and Expenditure Statistics (2005)

• Municipal Expenditure Detail (2004)

• Municipal Revenue Detail (2004)

• School District Expenditure and Revenue Detail (2004 to 2006)

• School Aid Data (2004 to 2005)

• Regional School Data (2005 to 2006)

• Selected Municipal Profile Data (1990 to 2005)

Listokin noted that most of these tables contain New Jersey data for the state (the entire state and the northern, central, and southern regions), 21 counties, 566 municipalities, more than 600 school districts, and the municipalities comprising the New Jersey Meadowlands District, Pinelands, Highlands, and Abbott school district areas.

The data (as of 2005) enable a current New Jersey statewide property tax profile to be created. Among key findings:

• The total “equalized” (or “true market value”) of all taxable property (land and improvements) in New Jersey as of 2005 approached $1 trillion dollars ($954.7 billion). Of that $954.7 billion total, residential parcels had a market value of $740.5 billion (78 percent), nonresidential parcels were worth $184.6 billion (19 percent), and vacant land and farm parcels were worth $29.6 billion (3 percent).

• Of the total $954.7 billion in equalized New Jersey property value, land was estimated to be worth $410 billion (43 percent) and improvements worth $545 billion (57 percent).

• On average, each acre in New Jersey had an equalized value of $201,118, about 0.6 percent of that amount comprising improvements.

• The amount raised from the property tax for all local government purposes in New Jersey was $19.6 billion. Of that total property tax levy, more than half ($10.8 billion or 55 percent) was comprised of school property taxes; about a quarter ($5 billion or 25 percent) comprised municipal property taxes; about one-sixth ($3.4 billion or 17 percent) was comprised of county property taxes; and about one-fiftieth ($392 million or 2 percent) were property taxes used for “other purposes,” such as open space preservation.

• The average “equalized” property tax rate in New Jersey for all governmental purposes (school, municipal, county and other) was $2.05. In other words, for every $100 of real property market value, about $2.05 (or 2.05 percent) was obligated in property taxes. A $200,000 house would thus pay approximately $4,100 in annual property taxes.

• Of the total average $2.05 EPTR, the average equalized school, municipal, county, and other property tax rates in New Jersey were $1.13, $0.52, $0.36 and $0.04, respectively.

• The average total annual property tax on residences in New Jersey was $4,644 per household and $1,718 per capita. The average total residential property tax comprised 5.7 percent of household income.

“Taxes are necessary to fund public services, and every tax needs to be evaluated across a spectrum of characteristics, such as ease of collection, stability of revenue generation, and equity to taxpayers – that is, whether it has a progressive or regressive impact,” Listokin said. “While the relative merits of the property tax warrant continued scrutiny, there is no denying the drawbacks of New Jersey’s disproportionate reliance on the property tax and consequent significant tax burden.

“Whereas the property tax in the United States funds on average about 25 percent of local general revenues, in New Jersey, the property tax finances about 50 percent of local general revenues.”

Listokin added that the disproportionate burden of property taxes in the state is of equal concern, with the burden often falling heaviest on the most disadvantaged households and/or challenging development in just those locations deemed most critical for investment under smart growth, such as infill locations near mass transit.