Throughout the year, this office has published a series of articles about real estate tax assessments. We have discussed how assessments are calculated, and how assessments can be appealed when they are too high. We have also discussed the fact that most real estate assessments in New Jersey do not exceed the actual value of the properties, and for many taxpayers, the high taxes they are paying is simply a function of a high real estate tax rate, which cannot be appealed. For our final article of this year, we will discuss some reasons why your tax rate may be as large as it is, and some ways that the local governments can (but probably will not) lower them.
The free market system, driven by the traditional principle of supply and demand, not only controls the prices of the products we buy, but also dictates the price that we pay for labor. We certainly would not continue to give raises, for example, to an undeserving employee, especially when many qualified applicants were waiting to take that person's job. Recently, much attention has been brought to the paradigm, which awards teachers for seniority, rather than academic achievement. Perhaps one of the greatest casualties of the expensive union contracts for public school teachers is that it comes at the expense of the school system's ability to hire additional necessary teachers, in the absence of substantial increases to the municipal budget.
According to recent data, the average cost to the taxpayers was $17,469 per child for the 2010-2011 school year. In Asbury Park, the cost per student for that same time frame was $29,819! We compared that figure to the prices for the 50 most expensive private schools in the nation. There was not much difference in the prices. In Newark, where the annual cost to the taxpayers for each school child now exceeds $25,000, hard working parents are forced to pay exorbitant taxes, as their children continue to receive subpar educations. Governor Christy has agonized over the inequality of treatment between children, based solely upon where they live. While private schools continue to be far less expensive, and in many cases, have higher academic standards than their public counterparts, there is still no tax credit for New Jersey parents that wish to send their send their children to private schools.
In 2002, the United States Supreme Court visited the issue of whether a school voucher program would, in some cases, be unconstitutional. The matter of Zelman v. Simmons-Harris, 536 U.S. 639 (2002) dealt specifically with the issue of whether the Establishment Clause of the Constitution would prohibit school vouchers on the basis that they are often used to fund a religious education. In writing for the majority, Chief Justice Renquist looked at several other cases in which the limits of Establishment Clause were analyzed. Justice Renquist remarked that "a program [which] was one of true private choice, with no evidence that the State deliberately skewed incentives toward religious schools, was sufficient for the program to survive scrutiny under the Establishment Clause." There was little doubt that the majority of private schools had a religious affiliation. Nevertheless, the intangible aid derived from those religious institutions was not sufficient to derail the voucher programs.
In New Jersey, over half of the real estate tax funds collected is used to fund the public school systems. Therefore, a voucher payment of even half of the aforementioned $17,000 that it costs to publicly educate a child for one year would result in excess of a 25% reduction of all real estate tax bills. It would also be enough to pay the entire tuition at many private schools, and increase educational opportunities for those who choose to remain at the public schools. Unfortunately, until vouchers are offered, New Jersey taxpayers can look forward to paying the largest real estate taxes in the nation. Of course, if your taxes are high because you are over-assessed, you can still call our office to handle your appeal.