Why Are Our Property Taxes So Damn High?

 That’s bold but I suspect there is some truth in that statemen.

 This thread is about SOMa specifically, not all of NJ. Our neighboring town's taxes are not nearly as high. 

SOMA's tax issues can't be solved without statewide changes in how education is funded.

HoBo said:
 This thread is about SOMa specifically, not all of NJ. Our neighboring town's taxes are not nearly as high. 

Our neighboring towns... 

Millburn and Livingston have malls.  Newark and Irvington get massive state aid. Union has Route 22 and commercial development. 

None of our neighboring towns are comparable to us.

What about West Orange?

Even if W. Orange is similar to SOMA, the big issue is funding and that needs to be deal with by the state level.  

Red_Barchetta said:

ml1 said:
racism is keeping NJ from consolidating districts

 That’s bold but I suspect there is some truth in that statement.

 You may not like the idea of merging the districts with the neighboring towns, because they include Newark, Irvington, and Orange. You may be willing to pay extra to prevent that. In fact, you are paying for it, hence the high taxes. Some people will claim it's not racism that creates this preference, just that the needs are so different. As @ctrzaska says, there is allure to the home rule.

jimmurphy said:

HoBo said:
 This thread is about SOMa specifically, not all of NJ. Our neighboring town's taxes are not nearly as high. 

Our neighboring towns... 


Millburn and Livingston have malls.  Newark and Irvington get massive state aid. Union has Route 22 and commercial development. 


None of our neighboring towns are comparable to us.

 The answer is to look at the budgets.

The 2017 budget for Maplewood assessed retail is 88.7%, commercial 8.54%.

For Millburn it was 81.3% retail, 16.5% commercial.

The difference is 8% more commercial for Millburn. 

mikescott said:
Even if W. Orange is similar to SOMA, the big issue is funding and that needs to be deal with by the state level.  

West Orange is a badly underaided district (with a $16,391,286 deficit for 2017-18), however, West Orange has chosen to have extremely high school taxes and spending that more than make up for its state aid deficit.

West Orange's Local Fair Share was $95,659,150, but its actually school tax levy was $133,615,444.

As a consequence of that choice to have very high taxes and spending, West Orange is the second highest spending K-12 district in Essex County, after ultra-rich Essex Fells. 

Millburn $16,591

Montclair $16,055  (which gets nearly 100% of its state aid)

Livingston  $16,169 

Newark $17,384 

South Orange-Maplewood $15,003

North Caldwell $17,498

West Orange  $18,788

West Orange got a $3.7 million state aid increase thanks to Steve Sweeney, but from what I have read, the West Orange BOE (tentatively) wants to spend that.

West Orange's municipal taxes are higher than SOMA's. 0.851, versus 0.758 for SO and 0.708 for Maplewood.

So for West Orange there are two important things to know.

1.  The district is badly underaided by the state.

2.  However, the BOEs there, over many decades, have chosen to make West Orange an extremely high spending district.

3.  Even WO's muni taxes are high.  

So for West Orange I think the conservative contention that excessive spending drives excesses taxes is largely correct.  

I am saying that we need to go to a system where at least 50% of the funding should come via the state to help allow for differences in the amount of commercial property that some towns have as well as economic differences in average income.  

Sales tax, income tax, lottery, etc --- the state can and should do.  

Tom_Reingold said:

As @ctrzaska says, there is allure to the home rule.

On a related topic, a candidate with that name is one of 11 running for the three BOE seats this year:

https://villagegreennj.com/schools-kids/11-candidates-and-just-one-incumbent-to-run-for-south-orange-maplewood-boe/

I’ll be looking for the pro-Eliot plank (class time must be measured out with coffee spoons?) in his platform.

You're lucky to have 11 candidates for three seats, and I would not hesitate to vote for Chris.

Runner_Guy said:

So for West Orange there are two important things to know.
1.  The district is badly underaided by the state.
2.  However, the BOEs there, over many decades, have chosen to make West Orange an extremely high spending district.
3.  Even WO's muni taxes are high.  

No one expects the Spanish Inquisition.

mikescott said:
I am saying that we need to go to a system where at least 50% of the funding should come via the state to help allow for differences in the amount of commercial property that some towns have as well as economic differences in average income.  
Sales tax, income tax, lottery, etc --- the state can and should do.  

Prior to the Abbott II decision of 1990, NJ did fund 25%-50% of education in towns like South Orange-Maplewood.  At that time, about a quarter of the SOMSD's operating budget was state aid and if you include TPAF, post-retirement medical, Teachers Social Security, the amount might have reached nearly 50%.  

However, the NJ Supreme Court declared that this level of funding was "counterequalizing" and ordered that the state eliminate all "Foundation Aid" to the SOMSD and about 200 other districts (not all of whom were nearly as affluent as the SOMSD.)  Chief Justice Robert Wilentz also threatened to declare unconstitutional the state's assumption of TPAF funding, calling it "constitutionally infirm."

"The minimum aid formula in the Act is counter-equalizing. It is distributed only to districts whose tax base exceeds the Act's guaranteed tax base, in other words, only to relatively richer districts.  Its sole function is to enable richer districts to spend even more, thereby increasing the disparity
of educational funding between richer and poorer. While substantially less than the amount of such aid under prior law ($48 million in the Act's second year as opposed to $290 million prior to the Act), the amount nevertheless is substantial and the distribution formula of the Act is worse, for it provides no such aid to poor districts. In 1984-85, minimum aid totaled $92.7 million and in 1989-90 it equaled $162.7 million. Under prior law all districts shared in minimum aid.

So, if we were to implement your idea (which I support), we would have to change the New Jersey Supreme Court.  Chris Christie wanted to do that, but, you know, the state also elected a Democratic Senate, and so he couldn't.  (If you want to have a different school funding formula, you have to replace Dick Codey with someone who gives a damn about property taxes.)

However, even in practical terms, you would have to define 50%.  Should the state fund 50% of whatever a district wants to spend?  So if some affluent and liberal  district wants to spend $30,000 a student, should the state have to fund $15,000 per student?  If the amount if 50% of whatever a district wants to spend, you have written a blank check to affluent districts that they will bankrupt the state on.  (this blank check already exists for TPAF, to a degree)

A better approach would be to have the state fund a certain percentage of the a district's Adequacy Budget.  To simplify, this is what Massachusetts and Maryland do.  In each state, the MD and MA state governments have a minimum funding percentage for each district's Adequacy budget*, and then districts have the legal ability to tax themselves and spend above the Adequacy budget  if they want to.  

However, this would allow significant inequality in school spending to develop and produce a spending race between districts, so it would make sense to also cap spending for affluent districts. (or subsume affluent towns into into diverse countywide districts, as Maryland does).

* it isn't called an "Adequacy Budget" in MA or MD.  They have their own terms for the same concept. I am simplifying.

Good points although I disagree that Christie really wanted to change the funding and never actually presented anything of substance.  And yes, the current Governor should go back to court to change the funding formula and what towns qualify as an Abbott school district.  

State has no clue what would be adequate, but how about enough to fund $10,000 /student with increases based on some reasonable formula.  Towns then could fund the difference at whatever level they feel is needed.  

Of course, none of this will happen with Murphy unless he is elected to a second term because I can't see anyone running for Governor and  attempting this in his first term.  Christie had the political capital to do when he won a second term but he blew most of that capital shortly thereafter  (bridgegate, not supporting mass transit, supporting Trump, etc).

DaveSchmidt said:

I’ll be looking for the pro-Eliot plank (class time must be measured out with coffee spoons?) in his platform.

I suspect it will be full of high sentence, but a bit obtuse. 

Runner_Guy said:

A better approach would be to have the state fund a certain percentage of the a district's Adequacy Budget.  To simplify, this is what Massachusetts and Maryland do.  In each state, the MD and MA state governments have a minimum funding percentage for each district's Adequacy budget*, and then districts have the legal ability to tax themselves and spend above the Adequacy budget  if they want to.  

 This is yet another way to create inequality, as it it provides a mechanism to fund schools of poor people less, while their needs are greater. I remember hearing a comment from a French person who said that France's approach is the opposite. They fund the needy more than the rest.

This is the flaw in the home rule approach. Affluent people complain about taxes but support them in certain ways, because we reap the benefits. Can we be honest about this?

Tom_Reingold said:

Runner_Guy said:

A better approach would be to have the state fund a certain percentage of the a district's Adequacy Budget.  To simplify, this is what Massachusetts and Maryland do.  In each state, the MD and MA state governments have a minimum funding percentage for each district's Adequacy budget*, and then districts have the legal ability to tax themselves and spend above the Adequacy budget  if they want to.  

 This is yet another way to create inequality, as it it provides a mechanism to fund schools of poor people less, while their needs are greater. I remember hearing a comment from a French person who said that France's approach is the opposite. They fund the needy more than the rest.
This is the flaw in the home rule approach. Affluent people complain about taxes but support them in certain ways, because we reap the benefits. Can we be honest about this?

Massachusetts and Maryland do give middle-income and low-income districts a lot more than they give high-income districts and I thought it was implied that NJ would do this too even if we set up a minimum funding law, but you're right that an approach like this would widen inequalities.  

However, I'd argue that the amount of spending that NJ's Abbotts spend is beyond the point of diminishing returns.  Asbury Park's spending is $36k per student (counting pensions) and its academic performance is in the bottom 1-2% of NJ.  Hoboken's spending is $28k per student and is the second highest in NJ and its performance is well below its demographic peers (which are districts who are 45% FRL eligible and 0-1% LEP). Other top spenders, like Pemberton and Keansburg, also do badly compared to demographic peers. 

I also think there are significant downsides to Abbott for the Abbott districts themselves, since NJ's direct property tax rebates and municipal aid have been cut so much.  Newark, East Orange, and Irvington have low school tax rates, but their municipal tax rates are extremely high.  Irvington's municipal tax rate alone is 3.6.  East Orange's is 3.0. 

And, what if a fraction of the money spent on PreK-12 education went to upgrade parks and public transit in the Abbott districts?  Wouldn't that be a socially positive thing too?  

Yes, I've heard that the excess money that some of those districts have is used on things such as computer equipment, because they already have everything they need that money can't buy. And yes, parks and public transit could stand improvements in those places.

But I hope you're not implying that the test scores show that they're doing something wrong. The problem is that the students come from poor families, not that the teachers or administrations are incompetent.

Tom_Reingold said:
Yes, I've heard that the excess money that some of those districts have is used on things such as computer equipment, because they already have everything they need that money can't buy. And yes, parks and public transit could stand improvements in those places.
But I hope you're not implying that the test scores show that they're doing something wrong. The problem is that the students come from poor families, not that the teachers or administrations are incompetent.

 I am not comparing the Abbotts to middle-class districts.  I am comparing the Abbotts to equally poor non-Abbotts whose students also come from very poor families. 

Since the Abbott decisions only pertained to districts who were legally classified as "urban," most of NJ's DFG A and B districts were never Abbottized and ended up spending much less on K-12 than the Abbotts and typically having $0 for PreK.

http://njeducationaid.blogspot.com/2016/07/abbott-ineffectiveness-elementary.html

http://njeducationaid.blogspot.com/2016/07/abbott-spending-has-been-ineffective.html

Throwing money at a problem is relatively easy as long as you have the money to throw.  Using the money to get at the root of the problem and develop successful ways to solve the problem - in this case poor academic achievement coupled with a too high drop out rate - is what is needed.  Unfortunately, it is not what is happening in some of the Abbott Districts.  This suggests to me that it may be time for a different approach.

Ten or fifteen years back, or perhaps a bit longer ago than that, the Star-Ledger did a very in-depth analysis of local and state tax burdens and compared all of the municipalities in the state.  While I'm sure that there have been some changes over time, I expect that the general message is not that different today.  In that analysis, they developed a "tax pain index" which took into account average incomes, average total tax burden (of ALL taxes, not just property taxes) and possibly a few other data points.  Maplewood and South Orange were WAY up at the top of the "Tax Pain" level (in the 90s on a scale of 1-100 where low was good and high was bad.)  Millburn and Short Hills were much lower (maybe 40s or 50s, but I'm not sure), despite the fact that their average property taxes were certainly higher than SOMA's (but their average property values were higher to an even greater degree, at least then and I suspect it is still the case.  I.e. their property tax percentage was lower and then there are the differences in average incomes.)  The mall was a big reason for the differences, but I recall that there were other factors as well.  Unfortunately, Google no longer turns up that article (or series of articles) but it was very illustrative of the problem.  I would love to see it updated for 2018 numbers, but given the decimation of journalism in recent years, they may not have the funding/staff for that kind of reporting now.  Our loss!