NEW JERESEYANS FAVOR MORE STATE SUPPORT FOR SCHOOLS

• Support increase in state income tax if accompanied by lower property taxes
• Cite local property tax as least fair form of taxation

TRENTON, October 7, 1999—A majority of New Jersey residents believe that the state government should pay a larger share—at least half—of the cost of public education, according to the results of a survey by the Eagleton Institute of Politics released today. To accomplish that goal, most New Jerseyans would support an increase in the state income tax—if it were accompanied by an equal decrease in local property taxes, the survey indicated.

"New Jersey residents understand that genuine tax reform will not take place until we rebalance the revenue sources for our schools; right now, we rely far too heavily on local property taxes," said Charles V. Reilly, New Jersey School Boards Association president, commenting on the results. "In New Jersey, the state government’s contribution to education has hovered around 40% for more than a generation, with local property taxes paying most of the education bill. In the rest of the country on average, the proportion of state financial support for education is close to 50%."

NJSBA commissioned the survey, "New Jerseyans’ Opinions on School Revenue Proposals." It was conducted in August with a random sampling of 803 New Jersey adults by The Eagleton Institute of Politics, Center for Public Interest Polling at Rutgers, the State University.

The Eagleton survey showed—

• 71% of New Jerseyans support increasing the state’s share of educational costs to at least half of the statewide total. (Fifteen percent of state residents oppose the concept.) "Support for this proposal is high in all areas of the state," stated the Eagleton report.
• To increase the level of state support for education, a majority of New Jersey residents (57%) support increasing the state income tax if the increase is matched by an equal decrease in local property taxes. (Twenty-seven percent of New Jerseyans oppose the idea of a tax shift.)
• A majority, 54%, cite the "local property tax" as the least fair form of taxation when offered the choice of "state income tax," "state sales tax" and "local property tax."
• Most New Jerseyans (52%) know that the majority of their local property taxes go toward school services, as opposed to county or municipal services. More homeowners (61%) than renters (34%) identify local school districts as the recipient of most of their property taxes.

"NJSBA’s policy on school property tax reform calls for a tax shift—not a tax increase," explained Edwina M. Lee, the Association’s executive director. "The issue of rebalancing school taxes does not center on school spending; instead, it focuses on the sources of funding—the state or the community, the income tax or the property tax."

To rebalance school taxes, NJSBA supports a dollar-for-dollar shift from the local property tax to the state income tax, so that the two revenue sources contribute the same amount of money to the state’s public schools. To accomplish the shift, the Association could support many methods. Alternatives could include a direct municipal property tax subsidy; a so-called "circuit breaker" that would limit property tax liability for people on fixed incomes; or a state income tax credit based on property taxes paid.

"Virtually every community includes senior citizens and others living on fixed incomes—citizens who often feel they have no choice but to oppose school spending proposals because of overburdening property taxes," commented NJSBA President Reilly.

An analysis by the Office of Legislative Services shows that more than 90% of New Jersey residents would pay the same or less in combined state and local taxes through a tax credit plan that included

a dollar-for-dollar shift from the local property tax to the state income tax, according to NJSBA.

The current school property tax rebate program, "New Jersey Saver," initiated by the Whitman administration, represents "a step in the right direction," according to Reilly.

"By establishing the rebate program, the governor and the Legislature have acknowledged our state’s overreliance on property taxes to support education," he said. "However, the administration’s plan is funded through the surplus in the state budget, which is extremely vulnerable to a downturn in the economy.

"With a permanent funding source and the recognition of the future controlled growth of school budgets, a tax rebate plan, like New Jersey Saver, could provide the basis for the tax shift that New Jersey residents support."

Concluded NJSBA Executive Director Lee, "The Eagleton survey results should send a clear message to our state’s leaders: Voters understand why their property taxes are high, and they are willing to support a permanent shift from the property tax to the income tax to solve the problem."