Sunday, February 14, 2016

2009 property tax increases the smallest in a decade

Property taxes on the average New Jersey home grew by $236 in 2009, or 3.3 percent over the previous year, the smallest average increase in a decade.

2009 property tax increases the smallest in a decade

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Property taxes on the average New Jersey home grew by $236 in 2009, or 3.3 percent over the previous year, the smallest average increase in a decade.

The state's average property taxes, long the highest in the nation, are now $7,281, according to data released by the Department of Community Affairs.

The 3.3 percent average increase is the smallest since 1999, when residential property taxes grew by 2.9 percent, according to historic DCA data. In raw dollars, the $236 jump in taxes was the smallest since a $232 average increase in 2001. Through much of the 2000s the average property tax bill rose by more than 5 percent a year, including three years with increases of 7 percent or more (04, 05, 06).

There are a few possible reasons for the smaller increase in 2009. Mayors and school boards may have been feeling the state's economic anxiety and realized that big tax hikes could be politically disastrous. Also, Gov. Corzine allowed towns to defer half of their required pension payments for the year, allowing many to put off those big costs until later (though increasing expenses in the future and adding to the pension fund deficit). Corzine's budget also increased direct aid to schools (which account for the bulk of property tax bills) with the help of federal stimulus aid. Gov. Christie has cut back $275 million of that aid, though, to close a budget shortfall he inherited.

Christie has warned towns and schools to expect aid cuts in the coming year as he deals with an $11 billion deficit. With towns also having to resume their full pension payments, local officials may have to get creative and cut spending to keep tax increases as low this year as in 2009.

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