Why Are Our Property Taxes So Damn High?

Added:  

I do think that there are important structural explanations for NJ's high taxes (like governmental fragmentation), interest-group explanations (like the power of public sector unions), and Supreme Court authoritarian explanations (Abbott), but when in 2018 NJ's Republics are a hopeless minority in the legislature and the victorious candidate for governor didn't purport to have a plan on taxes, you've got to conclude that the majority of NJ voters care more about things other than taxes.  

In other words "IT'S OUT FAULT."

Runner guy, Teacher's pay might be higher in NJ, but that is because in most states teachers are grossly underpaid.   And same could be said about student /teacher ratios.  I never heard a parent say, I wish our average class size was larger.   

Education makes up about 60% of the average property tax bill, and public safety makes up about 70% of the average municipal portion of the tax bill.  Plus the State budget is also very heavy on the public safety side (What do the state police do anyway besides give out speeding tickets?).  And the county has their own public safety budget.  

The funding for education is clearly a very large factor in the uneven tax burden in NJ.   

And quite frankly there has been a huge bi-partisan failure in fixing the school funding issue and we have not had a Governor since Florio who was willing to do anything.  They all point to Florio as a reason not to tackle the problem of reducing property taxes (and raising income and sales taxes to make up for the shortfall to towns).  If you actually try to do something we will vote you out.  

I don't think Prop 2.5 worked out so well in Massachusetts. I was living there at the time. Referenda such as that one don't seem like such a hot idea to me. To work well, you need an extremely well informed population. Analysis has to exceed "I'd like to pay less."

NJ-ians complain about their taxes but you more loudly demand high quality services. That's why life is good but expensive.

bigorangesplotmpwd said:
When asked the question people mostly mumble things like “Newark” or “Irvington” but that leaves me unconvinced. Anyone out there have a solid, simple and backed up with data reason as to why we pay such damn high taxes?  I feel I may be able to stomach it more easily if I actually understood it. 

 Saw this thread, Thinking I am experiencing Deja Vu all over again.

Tom_Reingold said:
I don't think Prop 2.5 worked out so well in Massachusetts. I was living there at the time. Referenda such as that one don't seem like such a hot idea to me. To work well, you need an extremely well informed population. Analysis has to exceed "I'd like to pay less."
NJ-ians complain about their taxes but you more loudly demand high quality services. That's why life is good but expensive.

Prop 2.5 works fine, as far as I can tell. Towns that can afford it pass out overrides like candy. Towns that can’t, don’t.

Of course, that leads to a rich town/poor town achievement gap you could drive a train through - but uhhh. 

What was the question?

Rich town poor town gaps are everywhere. It's pretty dismaying.

runner_guy, I've seen a few headlines about Sweeney's proposed school funding plan and how it will affect Jersey City. Do you know if this will help us? I seem to remember you supported Sweeney for governor because he was the only candidate with a realistic plan to improve school funding. (Sorry if I'm mis-remembering.)

For example: https://www.nj.com/hudson/index.ssf/2018/06/jersey_city_would_be_biggest_loser_under_sweeney_s.html

it’s basic economics -  we live in an expensive community, driven by its proximity to NYC.  It costs us much to live here -and so it will cost much for our educators, police, and firefighters to live in the area as well.  And so they must be paid accordingly.

kthnry said:
runner_guy, I've seen a few headlines about Sweeney's proposed school funding plan and how it will affect Jersey City. Do you know if this will help us? I seem to remember you supported Sweeney for governor because he was the only candidate with a realistic plan to improve school funding. (Sorry if I'm mis-remembering.)
For example: https://www.nj.com/hudson/index.ssf/2018/06/jersey_city_would_be_biggest_loser_under_sweeney_s.html

I was (and am) a big fan of Steve Sweeney's and was thrilled when Phil Murphy agreed to the state aid reform plan, but I was thrilled for New Jersey as a whole and towns like Belleville & Bloomfield, not SOMA.

There was a time a few years ago when the SOMSD was underaided by up to $17.5 million and getting 100% of our state aid would have been a game changer for us, but after a few years of strong real estate growth (and some aid increases), our deficit is only going to be $3.6 million for 2018-19.

For 2018-19 the SOMSD's Uncapped Aid is $8,626,865 and our actual aid is $5,033,885, so we have a $3,592,980 deficit.  The SOMSD does not even qualify for Equalization Aid anymore.  In the eyes of SFRA, we are the same as Millburn.

I would still celebrate if we got 100% of our state aid, but even if the BOE decided to use all of that money for tax offsets (which would not happen), it would be less than a 2% cut against SOMA's $200 million all-in tax levy.  

Since lowering spending isn't politically viable (or appropriate), I think the only real pathway for SOMA to lower its tax rate and individual tax bills is to increase our tax base.

mikescott said:
Runner guy, Teacher's pay might be higher in NJ, but that is because in most states teachers are grossly underpaid.   And same could be said about student /teacher ratios.  I never heard a parent say, I wish our average class size was larger.   

You might be right that in other states teachers are badly underpaid and class sizes are too large, but if you want to answer the _why_ of New Jersey's property tax burden, you can't ignore that public employees in NJ are better compensated than public employees in most other states and we have more public employees per capita (or per unit of GDP). 

I bring the salary and staffing ratios up because I see that as the real reason for NJ's high property tax burden, ie, we are paying a lot more than people in other states because we are getting a lot more than people in other states.

I think that the oft-made argument that compares NJ's property tax levy to the income tax levy and then concludes that the income tax is too low because it brings in half of the property tax is a red herring because NJ isn't a low-income tax state in any kind of national comparison.  

Counting all state taxes, the state government of NJ brings in $6,664 per capita, which is the the 4th most in the US.   Counting income taxes alone, NJ brings in $1,488 per capita, which is the 7th most in the US.

Low income taxes might explain why New Hampshire and Texas have relatively high property taxes,* but it doesn't explain why our state has high property taxes.

----

*Both TX and NH are usually ranked in the top five for property tax rates, but TX has no income tax and NH only taxes investment earnings.  

bigorangesplotmpwd said:
Are there other NJ towns who have low commercial ratables and similar cost per pupil school funding who have substantially lower property taxes?  If so, how come?  

 https://www.nj.gov/education/guide/2016/district.shtml

You can look here to get a breakdown of where the money goes.  One of the things I noticed how much more it costs to maintain our old school.

But to answer your question there are many towns to the west of here that spend the same per student and have much lower taxes.  Could be related to the ratables issue, but I'm sure that doesnt' account for all of it.

Here is a nice home in Randolph, NJ - good schools, nice area, although I question the playground in the living room .  Little far from the city but well within a radius of many good jobs.  Taxes are roughly 13K a year.

https://www.redfin.com/NJ/Randolph/2-Huntington-Dr-07869/home/37314823

Seems kind of odd to acknowledge that NJ taxes are among the worst in the country and yet hear some clamor that people still don't pay enough.

sportsnut said:

bigorangesplotmpwd said:
Are there other NJ towns who have low commercial ratables and similar cost per pupil school funding who have substantially lower property taxes?  If so, how come?  

 https://www.nj.gov/education/guide/2016/district.shtml
You can look here to get a breakdown of where the money goes.  One of the things I noticed how much more it costs to maintain our old school.
But to answer your question there are many towns to the west of here that spend the same per student and have much lower taxes.  Could be related to the ratables issue, but I'm sure that doesnt' account for all of it.

Here is a nice home in Randolph, NJ - good schools, nice area, although I question the playground in the living room .  Little far from the city but well within a radius of many good jobs.  Taxes are roughly 13K a year.
https://www.redfin.com/NJ/Randolph/2-Huntington-Dr-07869/home/37314823

Seems kind of odd to acknowledge that NJ taxes are among the worst in the country and yet hear some clamor that people still don't pay enough.

You might be surprised that most of the difference between SO and Randolph is in the municipal tax rate.

Morris County has an equalized county tax rate of 0.256 

Essex County has a county tax rate of 0.49 (which is actually at the state median)

Randolph's muni rate is 0.496 
South Orange's is 0.758 

Randolph's school tax rate is 1.715 
South Orange's is 1.696. (which is lower than Randolph's)

For schools, Randolph will actually get 200% of its recommended state aid next year.

Randolph will get $12,819,909, even though the SFRA formula says it only needs $6,249,680.

https://docs.google.com/spreadsheets/d/14ytXI05N3PibWE-iZbvHmgrgyLCi1WpUVFe9CaPwawI/edit#gid=0

HOWEVER, Randolph actually has school taxes which are at its local fair share, so that excess state aid goes into higher spending.

Randoph's budgetary cost per pupil is $16,850.

The SOMSD's is $15,003.

ml1 said:

bigorangesplotmpwd said:
Naive to think there would be a simple answer, but bummed there isn’t even some type of consensus. Or maybe I’m just not smart enough to understand many of the responses. I do know that there is not one single person outside of our region I’ve mentioned my property taxes to without that look of shock coming over their faces. You know the one. 


If it’s so damn complicated to understand perhaps there is something more going on. Corruption? Fraud?  Umm. 

 as I mentioned earlier, why not do some actual study of this issue?  The information is available to any curious person with the google and a little patience.  It's a complicated issue, and the people who read this board aren't necessarily experts on all the complexities. So why would you expect a bunch of regular folks to have comprehensive answers to a very complex issue?
or did you just want to go through the motions of asking the question in order to eventually make an accusation of corruption?

 It would appear that applying Occam's razor to the problem of exceptionally high property taxes in MaSO would deliver you to the simplest solution (namely, eliminate corruption, reduce excessive salaries/pensions of public workers, etc.).  Raising taxes more (for example, higher income tax rates for the wealthy) does not appear to be a simple solution to this issue.  Am I missing something here (for example, should Occam's razor not be applied in certain situations such as MaSO property taxes)?

See https://en.wikipedia.org/wiki/Occam%27s_razor  -  Occam's razor (also Ockham's razor or Ocham's razor; Latin: lex parsimoniae "law of parsimony") is the problem-solving principle that the simplest solution tends to be the right one.

RealityForAll said:

Am I missing something here (for example, should Occam's razor not be applied in certain situations such as MaSO property taxes)?

I don't know.  You tell me.  you're the one who is saying it will lead to a solution.

duplicate

Probably already mentioned here but in South Orange:

- % of land that's exempt (schools, churches, synagogues, university, etc.)

- 90% of costs fall on single family homeowners (we don't have enough ratables coming from our commercial districts).  Communities that have malls, major commercial corridors, etc. have much less of a percentage reliant on single family homeowners.

RealityForAll said:

ml1 said:

bigorangesplotmpwd said:
Naive to think there would be a simple answer, but bummed there isn’t even some type of consensus. Or maybe I’m just not smart enough to understand many of the responses. I do know that there is not one single person outside of our region I’ve mentioned my property taxes to without that look of shock coming over their faces. You know the one. 


If it’s so damn complicated to understand perhaps there is something more going on. Corruption? Fraud?  Umm. 

 as I mentioned earlier, why not do some actual study of this issue?  The information is available to any curious person with the google and a little patience.  It's a complicated issue, and the people who read this board aren't necessarily experts on all the complexities. So why would you expect a bunch of regular folks to have comprehensive answers to a very complex issue?
or did you just want to go through the motions of asking the question in order to eventually make an accusation of corruption?

 It would appear that applying Occam's razor to the problem of exceptionally high property taxes in MaSO would deliver you to the simplest solution (namely, eliminate corruption, reduce excessive salaries/pensions of public workers, etc.).  Raising taxes more (for example, higher income tax rates for the wealthy) does not appear to be a simple solution to this issue.  Am I missing something here (for example, should Occam's razor not be applied in certain situations such as MaSO property taxes)?


See https://en.wikipedia.org/wiki/Occam%27s_razor  -  Occam's razor (also Ockham's razor or Ocham's razor; Latin: lex parsimoniae "law of parsimony") is the problem-solving principle that the simplest solution tends to be the right one.

 You link to the actual definition and still you misapply Occam's Razor.

Nowhere does the definition suggest that reality must by default conform to your biases.  

RealityForAll said:

ml1 said:

bigorangesplotmpwd said:
Naive to think there would be a simple answer, but bummed there isn’t even some type of consensus. Or maybe I’m just not smart enough to understand many of the responses. I do know that there is not one single person outside of our region I’ve mentioned my property taxes to without that look of shock coming over their faces. You know the one. 


If it’s so damn complicated to understand perhaps there is something more going on. Corruption? Fraud?  Umm. 

 as I mentioned earlier, why not do some actual study of this issue?  The information is available to any curious person with the google and a little patience.  It's a complicated issue, and the people who read this board aren't necessarily experts on all the complexities. So why would you expect a bunch of regular folks to have comprehensive answers to a very complex issue?
or did you just want to go through the motions of asking the question in order to eventually make an accusation of corruption?

 It would appear that applying Occam's razor to the problem of exceptionally high property taxes in MaSO would deliver you to the simplest solution (namely, eliminate corruption, reduce excessive salaries/pensions of public workers, etc.).  Raising taxes more (for example, higher income tax rates for the wealthy) does not appear to be a simple solution to this issue.  Am I missing something here (for example, should Occam's razor not be applied in certain situations such as MaSO property taxes)?


See https://en.wikipedia.org/wiki/Occam%27s_razor  -  Occam's razor (also Ockham's razor or Ocham's razor; Latin: lex parsimoniae "law of parsimony") is the problem-solving principle that the simplest solution tends to be the right one.

Runner_Guy said:

sportsnut said:

bigorangesplotmpwd said:
Are there other NJ towns who have low commercial ratables and similar cost per pupil school funding who have substantially lower property taxes?  If so, how come?  

 https://www.nj.gov/education/guide/2016/district.shtml
You can look here to get a breakdown of where the money goes.  One of the things I noticed how much more it costs to maintain our old school.
But to answer your question there are many towns to the west of here that spend the same per student and have much lower taxes.  Could be related to the ratables issue, but I'm sure that doesnt' account for all of it.

Here is a nice home in Randolph, NJ - good schools, nice area, although I question the playground in the living room .  Little far from the city but well within a radius of many good jobs.  Taxes are roughly 13K a year.
https://www.redfin.com/NJ/Randolph/2-Huntington-Dr-07869/home/37314823

Seems kind of odd to acknowledge that NJ taxes are among the worst in the country and yet hear some clamor that people still don't pay enough.

You might be surprised that most of the difference between SO and Randolph is in the municipal tax rate.
Morris County has an equalized county tax rate of 0.256 
Essex County has a county tax rate of 0.49 (which is actually at the state median)
Randolph's muni rate is 0.496 
South Orange's is 0.758 
Randolph's school tax rate is 1.715 
South Orange's is 1.696. (which is lower than Randolph's)


For schools, Randolph will actually get 200% of its recommended state aid next year.

Randolph will get $12,819,909, even though the SFRA formula says it only needs $6,249,680.
https://docs.google.com/spreadsheets/d/14ytXI05N3PibWE-iZbvHmgrgyLCi1WpUVFe9CaPwawI/edit#gid=0
HOWEVER, Randolph actually has school taxes which are at its local fair share, so that excess state aid goes into higher spending.
Randoph's budgetary cost per pupil is $16,850.
The SOMSD's is $15,003.

Runner_Guy: I know that you are very informed on this issue, to your credit. 

 Please explain how and why some municipalities get so much more or so much less than their "recommended" state aid.  Is this just politics?? If so, how are our local state politicians such patsies??

jimmurphy said:

Runner_Guy said:

sportsnut said:

bigorangesplotmpwd said:
Are there other NJ towns who have low commercial ratables and similar cost per pupil school funding who have substantially lower property taxes?  If so, how come?  

 https://www.nj.gov/education/guide/2016/district.shtml
You can look here to get a breakdown of where the money goes.  One of the things I noticed how much more it costs to maintain our old school.
But to answer your question there are many towns to the west of here that spend the same per student and have much lower taxes.  Could be related to the ratables issue, but I'm sure that doesnt' account for all of it.

Here is a nice home in Randolph, NJ - good schools, nice area, although I question the playground in the living room .  Little far from the city but well within a radius of many good jobs.  Taxes are roughly 13K a year.
https://www.redfin.com/NJ/Randolph/2-Huntington-Dr-07869/home/37314823

Seems kind of odd to acknowledge that NJ taxes are among the worst in the country and yet hear some clamor that people still don't pay enough.

You might be surprised that most of the difference between SO and Randolph is in the municipal tax rate.
Morris County has an equalized county tax rate of 0.256 
Essex County has a county tax rate of 0.49 (which is actually at the state median)
Randolph's muni rate is 0.496 
South Orange's is 0.758 
Randolph's school tax rate is 1.715 
South Orange's is 1.696. (which is lower than Randolph's)


For schools, Randolph will actually get 200% of its recommended state aid next year.

Randolph will get $12,819,909, even though the SFRA formula says it only needs $6,249,680.
https://docs.google.com/spreadsheets/d/14ytXI05N3PibWE-iZbvHmgrgyLCi1WpUVFe9CaPwawI/edit#gid=0
HOWEVER, Randolph actually has school taxes which are at its local fair share, so that excess state aid goes into higher spending.
Randoph's budgetary cost per pupil is $16,850.
The SOMSD's is $15,003.

Runner_Guy: I know that you are very informed on this issue, to your credit. 

 Please explain how and why some municipalities get so much more or so much less than their "recommended" state aid.  Is this just politics?? If so, how are our local state politicians such patsies??

Thank you for the compliment and for asking...

I think that overaided school districts fall into three broad, often overlapping, categories.

1.  They were once properly aided, but have lost enrollment while keeping their old aid levels. (eg, many rural districts, many Jersey Shore Districts, and sometimes gentrified districts.)

2.  They were once properly aided, but have seen an increase in wealth and the high state aid level of the past is no longer appropriate.  (eg, Hillsborough, Jersey City, Hoboken, Weehawken)

3.  At some point in the past, they were the beneficiary of special litigation and received state aid that was not economically or demographically justified and have held onto that aid.   Several of the overaided Abbotts fall into this category, including Jersey City, Hoboken, Pemberton, and Asbury Park.  Overaided suburbs are rare, but suburbs who decades ago were involved in desegregation cases like Teaneck, Montclair, the Morris School District, and Englewood receive anomalously high levels of state aid compared to other suburbs, usually labeled as "Transportation Aid." Although their desegregation cases were decades ago, the extra aid they got then has been inflated upwards and so it's still visible if you check out their state aid numbers.  

Randolph appears to fall mostly into Category 1. ie, it has lost enrollment.  

In 2007-08, Randolph had 5570.0 students, but in 2017-18 it had only 4,702.  

jimmurphy said:

Runner_Guy: I know that you are very informed on this issue, to your credit. 


 Please explain how and why some municipalities get so much more or so much less than their "recommended" state aid.  Is this just politics?? If so, how are our local state politicians such patsies??

 Jim, 

Something counterintuitive about state and and NJ taxes is that overaided districts and underaided districts have the same tax burdens, on average.  Someone might expect that overaided districts would use their excess aid to lower taxes, but (on average) they don't, hence the fact that Randolph taxes at nearly 100% of Local Fair Share, despite having a large state aid surplus.  

Someone might expect that underaided districts would be forced into accepting very high tax burdens, but (on average), they don't.  

In other words, the extra state aid that overaided districts get goes into spending. The state aid deficits that underaided districts have are dealt with by having less spending.  

• The median overaided district pays taxes that are equal to 98.6% of Local Fair Share.  
• The median underaided district pays taxes that are equal to 98.2% of Local Fair Share.  
• For all districts, the median district's taxes as a percentage of Local Fair Share: 98.45%

Even the 85 districts who are overaided $2000 per student or more of their state aid have a median tax burden of 102% of Local Fair Share.  

You have to get into severely underaided districts to find that they have higher taxes. The 109 districts who are underaided by $2000 per student or more pay taxes that are 116.2% of Local Fair Share.

However, those high taxes among severely underaided districts aren't solely due to a lack of state aid, since underaiding and high tax rates can be both due to tax base erosion, and are thus "co-morbid." 

So, my expectation is that if NJ could fund every district at 100% it would not produce much tax relief because districts would tend to spend that money.  Of course some severely underaided districts would use their extra state aid to lower taxes (Newton and Freehold Boro are already doing this), but most districts will spend most of it.  

http://njeducationaid.blogspot.com/2018/04/2018-new-jersey-school-taxes.html

the SOMA school board is proposing an enormous bond issue and the scary part is that it is only part of the money that needs to be spent.  This state needs to come up with better ways to fund schools as opposed to relying on local property taxes.  

Many years ago an idea was floated of using a gas tax to fund the schools (since 40% of the gas in NJ  is purchased by out of state residents).  That would never fly now  that Christie implemented a new gas tax (due to his negligence for years).  If pot is every legalized in NJ, I would use all tax revenue that comes from that to be used towards school funding (and have the formula based on student populations ) and this should be in addition to whatever state aid that is already given.  I would also use all the new revenue from the proposed liquor license changes if that is  ever approved towards the education budget.  

mikescott said:
the SOMA school board is proposing an enormous bond issue and the scary part is that it is only part of the money that needs to be spent.  This state needs to come up with better ways to fund schools as opposed to relying on local property taxes.  
Many years ago an idea was floated of using a gas tax to fund the schools (since 40% of the gas in NJ  is purchased by out of state residents).  That would never fly now  that Christie implemented a new gas tax (due to his negligence for years).  If pot is every legalized in NJ, I would use all tax revenue that comes from that to be used towards school funding (and have the formula based on student populations ) and this should be in addition to whatever state aid that is already given.  I would also use all the new revenue from the proposed liquor license changes if that is  ever approved towards the education budget.  

I too would support using the gas tax to (partly) fund public schools, but only if an increase were designed with controls on spending, so that gas tax money supplants and and does not supplement existing school property taxes

But part of me thinks that any additional money NJ gets from legalized marijuana or raising taxes on gasoline should go to the General Fund, since the GF has had weaker revenue growth than the Property Tax Relief Fund (ie "income taxes") over the last few years and the TTF-related cuts to the sales tax and estate tax come out of the GF.

https://www.nj.com/politics/index.ssf/2018/06/why_phil_murphy_just_froze_state_spending_and_real.html

If you read the Treasury's reports on NJ's revenue from the last few months, a consistent trend is that the PTRF is doing well, but there is weakness in the GF.

https://www.state.nj.us/treasury/news/2018/news06142018.shtml

Most of what the GF funds is essential, federally-required services that can't realistically be cut and Medicaid is a huge cost driver, so I think weakness in the GF will lead to further neglect of NJ's public higher ed, whose funding is just average or below average, depending on how you parse it.

http://njeducationaid.blogspot.com/2017/05/new-jersey-underfunds-higher-education.html

mikescott said:
the SOMA school board is proposing an enormous bond issue and the scary part is that it is only part of the money that needs to be spent.  This state needs to come up with better ways to fund schools as opposed to relying on local property taxes.  

You probably wouldn't see much in the way of state aid even if significant changes were made, nobody has much sympathy for people earning more than 90% of the state (on average). My hometown (Tewksbury, MA) is kind of a middle income sort of place - but not what I'd consider "poor." They built a new high school in 2012 and the state paid for 60%. The town where I live (Needham) is pretty similar to Maplewood as far as economics are concerned. We're building a new elementary school right now. The state is only paying 20%. 

Runner_Guy said:

jimmurphy said:

Runner_Guy: I know that you are very informed on this issue, to your credit. 


 Please explain how and why some municipalities get so much more or so much less than their "recommended" state aid.  Is this just politics?? If so, how are our local state politicians such patsies??

 Jim, 
Something counterintuitive about state and and NJ taxes is that overaided districts and underaided districts have the same tax burdens, on average.  Someone might expect that overaided districts would use their excess aid to lower taxes, but (on average) they don't, hence the fact that Randolph taxes at nearly 100% of Local Fair Share, despite having a large state aid surplus.  
Someone might expect that underaided districts would be forced into accepting very high tax burdens, but (on average), they don't.  
In other words, the extra state aid that overaided districts get goes into spending. The state aid deficits that underaided districts have are dealt with by having less spending.  

• The median overaided district pays taxes that are equal to 98.6% of Local Fair Share.  
• The median underaided district pays taxes that are equal to 98.2% of Local Fair Share.  
• For all districts, the median district's taxes as a percentage of Local Fair Share: 98.45%

Even the 85 districts who are overaided $2000 per student or more of their state aid have a median tax burden of 102% of Local Fair Share.  
You have to get into severely underaided districts to find that they have higher taxes. The 109 districts who are underaided by $2000 per student or more pay taxes that are 116.2% of Local Fair Share.
However, those high taxes among severely underaided districts aren't solely due to a lack of state aid, since underaiding and high tax rates can be both due to tax base erosion, and are thus "co-morbid." 
So, my expectation is that if NJ could fund every district at 100% it would not produce much tax relief because districts would tend to spend that money.  Of course some severely underaided districts would use their extra state aid to lower taxes (Newton and Freehold Boro are already doing this), but most districts will spend most of it.  
http://njeducationaid.blogspot.com/2018/04/2018-new-jersey-school-taxes.html

 Thank you for taking the time to explain all of this.  It is very enlightening.

That said, in a town like Randolph where the average tax burden is seemingly lower given a specific assessment does it really come down to higher spending on things like "plant/salaries etc" that drives the higher cost in a town like Maplewood?

Schools sound like every other budgeted entity I've seen - if there is excess money they will spend it rather than give it back.  Makes it easier to keep asking for more.

sportsnut said:

Runner_Guy said:

jimmurphy said:

Runner_Guy: I know that you are very informed on this issue, to your credit. 


 Please explain how and why some municipalities get so much more or so much less than their "recommended" state aid.  Is this just politics?? If so, how are our local state politicians such patsies??

 Jim, 
Something counterintuitive about state and and NJ taxes is that overaided districts and underaided districts have the same tax burdens, on average.  Someone might expect that overaided districts would use their excess aid to lower taxes, but (on average) they don't, hence the fact that Randolph taxes at nearly 100% of Local Fair Share, despite having a large state aid surplus.  
Someone might expect that underaided districts would be forced into accepting very high tax burdens, but (on average), they don't.  
In other words, the extra state aid that overaided districts get goes into spending. The state aid deficits that underaided districts have are dealt with by having less spending.  

• The median overaided district pays taxes that are equal to 98.6% of Local Fair Share.  
• The median underaided district pays taxes that are equal to 98.2% of Local Fair Share.  
• For all districts, the median district's taxes as a percentage of Local Fair Share: 98.45%

Even the 85 districts who are overaided $2000 per student or more of their state aid have a median tax burden of 102% of Local Fair Share.  
You have to get into severely underaided districts to find that they have higher taxes. The 109 districts who are underaided by $2000 per student or more pay taxes that are 116.2% of Local Fair Share.
However, those high taxes among severely underaided districts aren't solely due to a lack of state aid, since underaiding and high tax rates can be both due to tax base erosion, and are thus "co-morbid." 
So, my expectation is that if NJ could fund every district at 100% it would not produce much tax relief because districts would tend to spend that money.  Of course some severely underaided districts would use their extra state aid to lower taxes (Newton and Freehold Boro are already doing this), but most districts will spend most of it.  
http://njeducationaid.blogspot.com/2018/04/2018-new-jersey-school-taxes.html

 Thank you for taking the time to explain all of this.  It is very enlightening.
That said, in a town like Randolph where the average tax burden is seemingly lower given a specific assessment does it really come down to higher spending on things like "plant/salaries etc" that drives the higher cost in a town like Maplewood?
Schools sound like every other budgeted entity I've seen - if there is excess money they will spend it rather than give it back.  Makes it easier to keep asking for more.

( : I've noticed that the administrators and BOE members in school districts with older buildings LOVE to bring up the higher expenses that result from having older buildings, even when that extra spending is a small fraction of an overall budget.  They like to bring it up because it isn't embarrassing to anyone.  If a district has old buildings and spends a lot on them, who is going to blame the Superintendent for that?

The SOMSD brings up old buildings, but here's an example of the Hoboken admin blaming its high spending on old buildings.

Note, if you dig in, Hoboken's spending is sky-high on EVERYTHING and Hoboken's buildings aren't that old either.  Hoboken's high school is post-WWII.  It's just an excuse to disguise the real reason, which is that Hoboken has very well paid teachers, very small classes, and lots of special perks like trips to Europe, Japan, and the Galapagos Islands.

The SOMSD's per student spending is actually now below the state average and the district doesn't pay for students to visit Japan, but the reason our spending feels even lower than it is and we have a chronic budget deficit are that 1) our teacher salaries are in NJ's top 10%.  2) our OOD tuition spending is *probably* in the top 5%, with related high spending in transportation.  

Although many people would support the SOMSD having highly paid teachers and a willingness to pay for OOD placements, these at least would be controversial and admins want to avoid that.    

Runner_Guy said:
Although many people would support the SOMSD having highly paid teachers and a willingness to pay for OOD placements, these at least would be controversial and admins want to avoid that.    

This reminded me: Are the frequent references in BOE agendas to "Confidential Special Education Settlement Agreements" about average for our size district, or does our district have a greater-than-average need for improvement in serving students with special needs? Are these settlement payments funded by our school budget, or some other source?

Michigan made it happen.  The state switched from relying on local property taxes to other taxes for school funding.  I am not aware of how well it turned out, but they did it.

https://www.freep.com/story/opinion/columnists/nancy-kaffer/2014/11/17/school-funding-michigan-education/19171581/

"How does Michigan pay for K-12 schools?

In 1994, Michigan voters passed Proposal A and reformed school funding. Prop A raised the sales tax from 4% to 6%, increased the cigarette tax and lowered the income tax from 4.6% to 4.4%, but most notably dropped and capped property taxes: Before its passage, the average district levied roughly 35 mills; Prop A limited school taxes to a statewide 6-mill tax for primary residences. That’s the difference, for the owner of a home with an assesssed value of $150,000, between a tax bill of $5,250 and one of $900. A “hold harmless” exemption allowed some school districts to assess additional mills; district voters could also approve higher tax rates for non-homestead properties. Before the passage of Prop A, schools were largely funded by local property taxes. Because communities with high property values or dense commercial development could levy a relatively low tax and generate more revenue than less-flush cities, spending per-pupil varied widely across the state.

Prop A was intended to create a larger pool and thus, more equitable funding.

And it kind of worked.

Prop A created a larger funding pool and brought funding closer to uniform, but not equal. Districts with hold-harmless exemptions have continued to levy a higher property tax rate, and catastrophically declining property values during the housing crisis of the last decade made significant dents in property tax collection across the state."

sprout said:

Runner_Guy said:
Although many people would support the SOMSD having highly paid teachers and a willingness to pay for OOD placements, these at least would be controversial and admins want to avoid that.    

This reminded me: Are the frequent references in BOE agendas to "Confidential Special Education Settlement Agreements" about average for our size district, or does our district have a greater-than-average need for improvement in serving students with special needs? Are these settlement payments funded by our school budget, or some other source?

I don't know about special ed settlements per se, but the SOMSD's OOD placement rate and OOD tuition spending are very high.

The SOMSD has the second highest OOD spending in Essex County, after Irvington.

There are different ways to parse any kind of spending, but in terms of dollars per student, we spend $1,840 per student, which is 77% above the county's (unweighted) average of $1,042 per student.

Irvington Township $2,180.44
South Orange-Maplewood $1,840.09
West Essex Regional $1,820.22
Cedar Grove Twp $1,689.88
West Orange Town $1,439.11
East Orange $1,224.84
Verona Boro $1,188.63
City Of Orange Twp $1,171.16
Essex Fells Boro $1,124.53
Caldwell-West Caldwell $1,077.79
Livingston Twp $1,057.48
Nutley Town $930.76
Belleville Town $898.51
Newark City $872.85
Glen Ridge Boro $814.61
Montclair Town $721.07
Millburn Twp $569.03
Bloomfield Twp $548.27
Roseland Boro $278.09
Fairfield Twp $265.46
North Caldwell Boro $171.06
Unweighted Avg $1,042.09

Over half - $3.2 million - of our $5.7 million in transportation spending is actually for OOD transportation as well.

If you went by OOD placement rate the SOMSD would also be in second place in Essex County.

But wouldn't you agree that OOD placement funding and these special education settlement amounts probably need to be looked at jointly, not separately?

For example, if OOD is high, but settlements are low, this could indicate that the higher rate of OOD placements is reducing the need for lawsuits on behalf of special education students. 

Runner_Guy said:
Although many people would support the SOMSD having highly paid teachers and a willingness to pay for OOD placements, these at least would be controversial and admins want to avoid that.    

 I'm not sure that "willingness to pay for OOD placements" is a correct way of characterizing it.  Schools are required under Federal law to give every student a fair and appropriate education, and if the schools are unable to accomodate a student's disabilities in-district, they are required to pay to do so out of district.  Sometimes parents have to go to court to force the district, hence the references in the budget to special ed settlements.  ETA:  I believe some of the references to settlements relate to parents who took their kids out of district on their own and have had to sue the district afterwards to get them to pay for it. 

The district has stated for years that they are making efforts to bring more of these students in-district, but frankly the special ed department has been in such a state of disarray and turnover for for so many years that I'm not surprised we have such a high degree of OODs.  That said, I think the current interim (yes) director Dr. Morana is making some real progress to get the department in shape (and in compliance with law) that we hopefully will see some improvements in this area.  She's part of the bring broom Dr. Ficarra has brought in to clean up a lot of issues that have been percoloating for too long.  Unfortunately she often has to spend a lot of her time testifying in trials/hearing about matters she inherited.....