Michael Symons

@MichaelSymons_

Hold onto your wallets: Property taxes in New Jersey increased by their fastest rate in four years in 2015, with landowners shelling out an extra $537 million.

The hike pushed the average local tax bill to $8,354 for homeowners, up $193 from the prior year, according to data compiled exclusively by the Asbury Park Press. That’s an increase of 2.4 percent, despite a supposed 2 percent cap enacted in 2010.

SEARCH NOW: See how those taxes have changed in just one year in your town

The jump marks the second straight year New Jersey’s property tax hike has gotten bigger, after three years of slowing growth in Gov. Chris Christie’s first term. Monmouth and Ocean counties fared worse most of the state with tax boosts of 2.6 percent and 3.3 percent, respectively.

The trend undercuts one of Christie’s selling points as he touts his gubernatorial record on the GOP presidential campaign trail. On his campaign website, Christie says property taxes are rising at their slowest pace “in more than two decades.” Growth has grown since dipping to 1.3 percent in 2013.

The new accounting tells a costly different story — in a state where homeowners already pay the highest-in-the-nation property taxes. That burden helped drive nearly 14,000 to sign an Asbury Park Press petition urging elected officials to cut property taxes. The petition came in tandem with Asbury Park Press’s investigation of the tax crisis last fall.

Stay or leave?

Adrienne DiPietro’s property taxes have tripled in the 20 years she has lived in Eatontown. She remains optimistic elected officials will do something about the problem but says “I’m not holding my breath.” She is considering whether she and her husband, Paul, will stay in New Jersey. Both are retirees.

“All of our retirement income, we have to start thinking about this in the next five years or so: Do we want to stay here and keep coughing up that much taxes?” DiPietro said. “Do we want to stay here, because the taxes are only going up and up?”

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Property taxes rose approximately 8 percent in Asbury Park and Eatontown; 7 percent in Lakewood; 6 percent in Toms River; 4 percent in Freehold Township and Marlboro; and 3 percent in Long Branch, Middletown and Stafford. Other notable increases included 12.5 percent in Seaside Heights; 11 percent in Mantoloking; and 8.5 percent in Deal.

Christie gets a chance to outline a New Jersey agenda Tuesday in his State of the State address, but property tax relief is unlikely to top his list.

His chief state policy focus is likely to be on public workers’ pensions and health benefits — issues that got no traction in 2015. And he has made plain that his chief political goal — for the foreseeable future at least — is running for president.

No immediate help is forecast from the Legislature either.

Senate Democrats’ plans for the coming year focus on six areas, and property taxes isn’t one of them. The Assembly speaker is primarily focused on transportation funding. Both sides of the Legislature are battling over North Jersey casinos and advancing constitutional amendments on gasoline taxes, redistricting and pension funding.

At the same time, the spending pressures that are leading to tax increases show no signs of abating. Gains in state tax collections will be needed for years to come to pay down a decades-in-the-making pension deficit. The prospects are concerning to John Mazziotta.

He moved to Lakewood from Staten Island in 2010 but worries he’ll have to move again when he retires “because property taxes are going to be way too high.”

“If New Jersey keeps this up, I could move to Delaware. Taxes are a lot cheaper, could get a house just as nice as what I have. Retire there, or to Pennsylvania,” Mazziotta said. “I want to stay in New Jersey. I like where we live. I like the house, I like our neighbors, the whole bit. I don’t want to be forced out.”

“New Jersey’s going to lose a lot of people,” he said. “I have no hope. One thing about taxes: they go up.”

‘Too much government’

Monmouth University pollster Patrick Murray said rising property taxes are among the factors hurting Christie’s popularity in New Jersey, though he doubted it would hamper his standing in national politics unless he becomes the Republican presidential nominee and more attention is focused on his record in New Jersey.

13,000+ sign tax petition; most lawmakers say �No!� to change

“People see what their property tax bill is, and the 2 percent cap wasn’t enough. And if they didn’t believe it wasn’t enough, the fact that there are provisions where you can exceed that cap does not escape the voters’ notice,” Murray said. “Every time we ask the question about whether people want to stay here in New Jersey, those who want to leave list property taxes as the No. 1 reason.”

Property owners paid $537 million in additional taxes last year, with the total tab now approaching $27.7 billion. That number is impacted significantly by the fiscal crisis roiling Atlantic City, which made deep cuts in spending last year in an effort to stave off bankruptcy. Set aside that one municipality and last year’s property tax levy would have risen $662 million statewide.

Nonetheless, there’s scant evidence the issue is a top priority at the Statehouse.

“You realize property taxes are done at the local level, correct?” said Senate President Stephen Sweeney, D-Gloucester, noting that the state sends a significant amount of state funding to local governments already.

Direct state aid to local governments has been nearly stagnant in recent years, however, pushing more of the cost burden to counties, municipalities and school districts, which have few options for raising revenue other than boosting property taxes.

“We want to focus on property taxes,” Sweeney said. “I’ve had a shared-services bill that’s been bottled up in the Assembly for two years now, actually four years. I’d love to see the shared-services bill move. I’d like to see local governments working together more. We have how many hundreds of school districts and how many hundreds of municipalities? We have too much government. And until we shrink government, you’re not going to see a big difference in property taxes.”

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“This should be the No. 1 priority for us here at the Statehouse,” said Assemblyman Anthony Bucco, R-Morris. “This is a thing that is driving people out of the state, and unfortunately the majority party just is not focused on it... We really need to take a step back and look at where we’re going because we’re in trouble in New Jersey.”

Christie spokesman Brian Murray said property taxes increased by an average of 1.9 percent in Christie’s first five years as governor and that Press’ estimate matches the 2011 increase.

“The state is still finalizing its data on property taxes for 2015,” said Murray, who is not related to pollster Patrick Murray. “Regardless, your own estimates make it obvious the growth of New Jersey property taxes remains very close to the annual 2 percent cap imposed by Gov. Christie — and far below the astounding 7 percent per year tax growth New Jersey averaged during the decade preceding his arrival in office.”

“You have to ask yourself: Where would New Jersey’s property taxes be if not for Gov. Christie’s reforms, if annual average increases continued at a rate of 7 percent for the past six years?” Murray said.

A cap with holes

In 2010, Christie and legislative leaders adopted a 2 percent cap on increases in the property tax levy. The law doesn’t cap increases in individual property tax bills at 2 percent. Last year, average property taxes rose by more than 2 percent in almost 60 percent of the state’s cities and towns.

Additionally, while there are far fewer exceptions to the 2 percent cap than there were under previous caps, the law didn’t create a hard cap. Increases in spending for pensions, health benefits, emergencies, capital expenses and debt service aren’t covered. Local governments that are under the 2 percent cap one year can “bank” the balance for up to three years and use it to exceed the cap, if they want.

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The cap had more of an effect in recent years than it does now due to how a 2011 state law overhauling public workers’ pensions and health benefits gradually took effect, said Marc Pfeiffer, assistant director of Rutgers University’s Bloustein Local Government Research Center.

Public workers paid more toward their benefits each year, and local governments were able to more easily absorb cost increases as an increasing share was shifted to employees. For a while, that blunted the impact of rising costs. But that phase-in is now complete in most local governments, depending on when their last union contracts expired.

That means that most of the local governments are now back to paying for increasing costs without an offsetting reduction. Hence the benefits are wearing off, Pfeiffer said.

“That saved taxpayers money because they didn’t have to spend as much on health care as they were spending previously, but that was offset by increasing costs for health care. There’s a plus and a minus there,” Pfeiffer said. “But going forward, we’re not hitting a point where there are very few minuses. It’s mostly pluses.”

Pfieffer said more than $90 million in additional spending on pensions by local governments was outside the cap in 2015. For health insurance costs, increases of up to 7.4 percent were allowed last year. This coming year, increases of up to 5.8 percent will be excluded from the cap.

For some homeowners, last year’s increases were offset by the payment of property tax credits in May 2015. Those credits averaged $469 statewide and technically represented the payment of homeowners’ long-delayed 2012 benefit. Credits were available to seniors with household incomes under $150,000 and other homeowners with incomes under $75,000.

The property tax figures are unofficial and were compiled by Asbury Park Press, which obtained abstracts of tax values and property data from the 21 counties. The Press’ calculations used the same formula as the one used by the state Department of Community Affairs each year.

The DCA’s official publication of the new rates hasn’t been done prior to February in recent years, long after Christie’s State of the State sets the agenda for the coming year.

New Jersey property tax growth biggest in three years

Michael Symons: (609) 984-4336; msymons@gannettnj.com





