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Once again Millburn has the dubious distinction of having
the highest property taxes in New Jersey.
In September of 2005 the Property Tax
task force of WeLoveMillburn.com issued their first report.
Now, six months later, we have an addition to make to
that same report. Unfortunately, Millburn's property
taxes are once again the highest in the state. Also New
Jersey's property taxes, according to Governor Corzine
in a January 15th article in the Star-Ledger, are the
highest in the country.
First an update about the overall state property tax
issue.
The Newark Star-Ledger reported on January
15th the following. The front page headline was "Property
taxes soar 29% in 4 years." The
article went on to say that a new Star-Ledger analysis
put
last year's (2005) increase at 6.3 percent. The same
article wrote about new Governor Corzine pledging to
boost property tax rebates and work on a long-range
solution to an issue that has bedeviled New Jersey
for decades. Governor Corzine, in the same article,
admitted we had the worst tax problems in the country
when he said "I understand why the public is inflamed.
We have the highest. It really is the problem that
people say it is." Other interesting facts from
the same article were:
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Ninety-six of the state's 566 cities and towns were rocked by average tax hikes
of more than 10 percent.
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Forty-six towns had average property tax bills topping $10,000 — 8 more than
in 2004.
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Forty-five counties including Essex had average tax bills exceeding $7,000.
Here is where
Millburn falls in the group of
ten cities and towns
with the highest property tax average
in 2005.
Below we are only listing the ten towns with
the highest average property taxes in 2005. This information
is from the same January 15th issue of The Star-Ledger.
The actual full page chart showed the 2004 and 2005 averages
for all 566 towns and cities in the state.
Once again we have the dubious distinction
of having the highest average property taxes in the state.
Actually, in some ways, it is even worse
than the figures above would indicate. Here is why. Our
average assessment in 2005 for Millburn was $773,836. But
when you look at a town like Alpine, you see that tax average
is based on an average 2005 assessment of $2,430,010. Rumson
average assessment was $1,080,571. Essex Fells was $1,041,291.
Or, look at a small town in Ocean County named Mantoloking
where the average assessment was $1,786,209 and average
property tax was only $12,736. Or, look at Saddle River
where the average assessment was $1,554,519 and the average
property tax was $12,125. Or one more — Harding where the
average assessment is $1,169,469 and the average property
tax was $10,876. The point here is not just that we had
the highest average property taxes but also our ratio of
assessment to property tax is not in our favor compared
to many other towns. Also as a reference the average property
tax for all homes in the state is $5,867.
The source for this material was an analysis
by Robert Gebeloff of the Star-Ledger. He wrote that his
sources were county tax boards, statewide tax rolls from
the Department of Treasury and historical data from the
Office of Legislative Services.
Repeated below is the original report in
entirety as published on the WeLoveMillburn website on
September 10, 2005. The previous report below goes into
the breakout of how property tax spending is allocated
between school, municipal services and the county.
September 10, 2005
Why does Millburn have the
highest property taxes in New Jersey?
This report has been compiled and
written by the Property Tax task force, which is part of the new grassroots
educational group, WeLoveMillburn.com. The report is not intended to
answer all of the questions that we hear from residents about why our
taxes are so high. The WeLoveMillburn.com group is in the initial phase
of gathering information and doing research on this complex issue.
This first installment is meant to provide the community with a foundation
of understanding about what is causing the dramatic growth in our property
taxes. Future reports will delve deeper into specifics as to why Millburn's
taxes are the highest in the state and also why New Jersey's property
taxes are the highest in the country.
Although much attention has been focused on the schools and the currently
proposed school bond referendum, property taxes are dramatically affected
by municipal, county and state issues as well. Over the remainder of this
year and into next year, we will educate residents as to what can and cannot
be done to alleviate our property tax burden at each of these different
levels of government.
Millburn has the unfortunate distinction of having the highest property
taxes in New Jersey.
Millburn has the highest property tax per household in New
Jersey for years 2003 and 2004. Millburn also has the highest growth in
property taxes over the past 10 years of the top 5 taxed towns in New Jersey.
A January 23, 2005 report, by New Jersey's largest and most
influential newspaper The Star Ledger, compared every municipality
in the state of New Jersey. In that report, Millburn held the distinction
as having the highest property taxes per home of any in almost 400 municipalities
reviewed. The research concluded that with an average per household 2004
tax bill of almost $15,000, Millburn is roughly 3 times the state average.
Millburn residents paid the largest average property tax bill in the state
for the second year running. Comparable towns to Millburn (Westfield, Livingston,
Maplewood, Summit, Chatham, Madison, etc.) were all between $8,000 to $11,000.
One of the first questions WeLoveMillburn.com has to raise is "Should
it cost more to provide services to houses in our community than it does
in these communities? If so, why the significant difference?" Our
community deserves to understand what is behind the differences in these
numbers.
Also quite painful:
New Jersey has the highest property taxes in the country.
The state of New Jersey was recently named as the worst state
in the country for property taxes according to a CNN Money 2005 survey.
With Millburn having the largest average tax bill in the state and the
state having the largest within the country, you can draw the conclusion
that Millburn is certainly one of the most highly taxed communities in
the entire country. Again, our community, not to mention the entire state,
deserves to understand what causes this problem. The result of high property
taxes has been and will be insidious. Not only does it affect property
values but even more importantly it dramatically affects the entire States
economy, particularly employment growth.
What has driven Millburn's property taxes to such a high level?
Millburn property tax increases have been consistently high
and increasing over the past 10 years. Looking at how our tax dollars are
allocated gives us a realistic view of where the growth in our tax bill
is coming from.
School spending today accounts for 50% of our property
tax bill and has represented the biggest area of tax growth. Increased
school enrollment, school renovations, construction, and debt service
has and potentially will continue to put pressure on our school budget.
School spending is a major theme across our town and our state. As shown
in table 4, school spending on average grew at less than 7% in the 1990s
but since 2000, spending has grown more than 10% per year. While that
spending did finally decelerate, that result is mostly due to State caps
on the school's operating budget. If the currently proposed bond referendum
passes growth in school taxes should accelerate once again.
Note: Table 3 and Table 4 represent data that were obtained
from Millburn township records and reformatted. 2005 is a budget
number. Prior to 2005 are actual numbers.
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County spending is often blamed for our problems. However,
in recent years this issue has been getting a lot better. The county
is still a significant expense for our town with arguably little return
in services, however, the county expenses as a percent of total expenses
have been decreasing consistently as shown in table 3 for five years.
While the county has been getting better as a percent of our total tax
bill, it is still a very large number at more $30 million. What is more
disconcerting is our town's exposure to the potential growth in county
spending. There have been reports, that with maturing Essex County debt
and state aid diminishing, we should expect a higher tax bill from the
county in years to come.
Municipal spending has begun to grow rapidly again after
many years of modest growth. While dwarfed by school expenses, municipal
taxes grew only modestly during the 1990s. Unfortunately, municipal taxes
have begun to increase dramatically for the past three years at 10% or
more. At this point, we are not as clear as to what is causing this recent
growth so obviously this will be something that we will be looking into
in future reports.
The bottom line: it's time that we, as a community, take the responsibility
for understanding and then taking action about our taxes. The risk of rapidly
rising taxes is far from over.
We, as a community, need to understand why our taxes are
so high compared to our neighboring communities, the rest of the state
and the rest of the country. Once we better understand the problem, we
need to begin challenging plans that lock us into higher tax commitments
for years to come and only approve plans and funding when based on facts
and merits.
This report started off by stating that this was the first
in a series of reports on property taxes. In following installments, we
will gather further information and do the research to better understand
the total picture. For instance, we will investigate some of the near term
potential tax liabilities like:
-
Short Hills Mall tax appeal
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New Town Hall
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Essex County debt maturing
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Township employee pension funding
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School bond referendum
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Township reassessment
WeLoveMillburn.com's mission, as we have
stated on our website at www.WeLoveMillburn.com, is
to help all the residents to be better informed about
the issues that affect our community. We do this in
a positive spirit of informing one another about what
is happening, what is not happening and what is possible.
We are all neighbors and this is our town.
WeLoveMillburn.com
January 21, 2006
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