New Jersey has the highest property taxes in the nation. High property taxes place a burden on homeowners, are not based on an individual’s ability to pay, and erode community support for essential school programs and services. A major cause of New Jersey’s high property tax rates is an imbalance in the share of state and local revenues used to fund education.

Nationwide, state governments provide an average of about 50 percent of the funding for their schools. New Jersey, on the other hand, contributes only 39 percent. As a result, school districts have no choice but to make up the difference through local property taxes. In addition, the fact that the state has held public education funding flat for three of the past four years means that local property tax increases have been needed simply to keep up with the cost of inflation.

NJSBA Policy The New Jersey School Boards Association has a long-standing policy that the state should provide at least 50 percent of the cost for educating our children. To achieve this goal, the Association’s policy calls for a dollar for dollar trade-off between the property tax and income tax until a balance is achieved.

NJSBA believes that the income tax is a more progressive tax as it is based on an individual’s ability to pay. An even balance between the two tax revenue sources with circuit breakers in place for low income individuals is preferred by the Association.

Proposed Remedies The Legislature spent most of this year trying to garner support for a constitutional convention to tackle the property tax issue. Although the Assembly passed a bill to allow the voters to decide on whether or not to convene a convention, the Senate failed to act by the statutory deadline. NJSBA opposed a constitutional convention since it would allow the Legislature to abdicate its authority to levy taxes and its responsibility to provide a thorough and efficient education. 

NJSBA prefers a special session of the Legislature to solve the problem and will soon embark on a campaign asking the governor and the Legislature to hold a special session.

A number of bills have been introduced by lawmakers to provide property tax relief to our citizens. The NJ SMART plan (A-4041), sponsored by Assemblyman Louis Manzo, most closely aligns with NJSBA policy. There have also been plans promoted by the gubernatorial candidates and at least one education group. These proposals would provide an excellent starting point for the discussion on holding a special session of the Legislature.

For our members’ convenience, we have prepared a Property Tax Comparison Chart with a listing of the major proposals.