By Brian Thomas
Nowhere left to go, but up? Maybe?
In what has become an unfortunate annual occurrence, New Jersey was ranked 50th in terms of overall tax climate by the Tax Foundation – solidifying the Garden State’s “worst in the nation” status yet again as the State limps across the fiscal finish line towards the new year.
The Tax Foundation’s State Business Tax Climate Index considers several factors before creating state rankings, including the impacts of: sales; gas; business; property; & income taxes (etc.). The information gathered allows policymakers, businesses, & taxpayers to have a general guide to compare tax systems across the country.
In the case of New Jersey, it highlights a perpetual inability to create a healthy economic environment conducive for residents & businesses, especially when it comes to property taxes:
“The states in the bottom 10 tend to have a number of afflictions…New Jersey, for example, is hampered by some of the highest property tax burdens in the country, recently implemented the second highest-rate corporate income tax in the country, levies an inheritance tax, and maintains some of the nation’s worst-structured individual income taxes.” – The Tax Foundation (2018)
48th in property taxes… that’s something at least, right?
Sadly, no. New Jersey’s move up to 48th in the property tax portion of climate index was due to the repeal of the “estate tax” last year & does not signal a move toward significant relief for residents.
On average, we still pay the highest amounts in the nation ($8,690) as well as the highest effective tax rate at 2.38% –higher than New York & Maryland. In fact, on a per capita basis, things continue to worsen.
What does that mean?
If you divide the total amount of property taxes collected throughout a state by total population, you are left with the per capita amount. So, in the case of New Jersey, every resident regardless of age would need to pay roughly $3,074 in order to meet the $29 billion+ collected in property taxes last year.
A staggering figure considering it is $200 more than Connecticut’s & $400 more than New York’s per capita debt. Making it worse is that as property taxes climb, so does that overall number.
What can be done?
It is no secret the how dire the situation in the Garden State is & to suggest otherwise is being wholly unrealistic. We need to consider every proposal (pension payments, school funding, healthcare costs, shared services, etc.) no matter how painful, & examine where/how to redevelop our current tax climate.
“Stop gap” measures have stopped working – kicking the can down the road does nothing other than delay the inevitable & further exacerbate the problems we face.