For taxpayers, New Jersey is a land of national distinction.

Nowhere is there a higher average property-tax bill: $6,796 per household, up more than 50 percent in just the last five years.

And that, in a costly nutshell, is why New Jerseyans are some of the angriest taxpayers in America.

Among seniors, the anger is giving way to panic, Tom Yarnall warns. "Are we going to run out of money?" he asked. "Or are we going to run out of heartbeats?"

Yarnall, 76, a retired computer specialist, pays $9,053 in property tax - about one-quarter of his fixed income - on his two-story colonial on Weston Drive in Cherry Hill. That's up from $6,344 in 2002, a 43 percent jump.

"When I retired, I thought I was in good shape," he said. But every year, "I'm taking more and more out of our savings. It will be gone in eight to 10 years."

Last week did nothing to allay his fears.

On Monday, the state legislature passed a $32.9 billion budget for fiscal 2008-09 that lowers or erases $254 million worth of property-tax rebates for more than 500,000 residents - just a year after the rebate checks were pumped up to ease the increasingly onerous burden on homeowners.

The budget also pares $160 million in aid to municipalities, which have long complained that Trenton gives them short shrift, thereby forcing them into an untenable dependence on the real estate levy.

Between 2002 and 2007, property-tax collections went from $16 billion to $22.1 billion - a 38 percent jump caused largely by the ballooning costs of running schools and towns. That increase was more than double the inflation rate in the same period. And, yes, that was with rebates included.

"They did take a tough hit," Gov. Corzine said last week of the municipal cuts, part of the budget's $600 million in cutbacks. "I understand that. Just as the [state] government is taking a tough hit."

However, he said, the decreases in rebates and municipal aid would be counteracted by a $570 million increase in education funding, and that would mean some savings for property owners.

Corzine said he did not believe that "the overall impact will be as powerful as is being suggested."

One of those doing the suggesting is William G. Dressel Jr., executive director of the New Jersey State League of Municipalities. He has referred to the real estate levy as "the Jason and Friday the 13th property-tax monster." And that was before the new budget passed.

Last week, a steamed Dressel recalled the Corzine administration's vow, early on, to tame the tax. Now, "they are setting a whole new standard in terms of degree of hurt," he said. "Every dollar [cut from municipal aid] is going to have to be made up with property-tax increases, or reductions in service."

The timing is terrible, he added. "The economy is going south. Residents are seeing skyrocketing fuel costs, food costs. Essential expenses for maintaining your household are going through the roof."

The state sales- and income-tax revenues are unexceptional, in the bottom third nationally. But the chart-busting real estate levy erases that advantage, leaving New Jerseyans with one of the highest overall tax burdens.

Several factors have put the state on the local-tax pedestal: