North Jersey Public Policy Network“Creating Thriving Communities in Challenging Times”Tim Evans • New Jersey Future • Febr...
Median Real Estate Tax Bill (2010)     New Jersey                       6,828     Connecticut                      4,903  ...
Over-Reliance on Property Tax           Percent of Total State and Local Tax Revenue Derived                             F...
Basic Property Tax Facts• Schools represent the bulk of local  government expenditures• Residential development doesn’t pa...
Over-Reliance on Property Tax :      Why Is This a Land-Use Issue?• Incentive to zone out children        [keep out housin...
Over-Reliance on Property Tax :        The Consequences• Downward spiral of disinvestment,               wherein  a declin...
Is It Really a Property Tax Problem?Many of the land-use side effects of the property tax  system are actually more proper...
3 big counties, similar populations,     dissimilar school systems                                                        ...
North Penn School District, Lansdale PA   operates all schools, K thru 12                                     2010 populat...
2010                                                  population    3 Bergen regional high school districts:         93,50...
Bergen County school system much         more fragmented                                                          number o...
Bergen County school system much         more fragmented                                                          number o...
North Penn School District, Lansdale PA   North Penn School District   Hatfield borough   Hatfield township   Lansdale bor...
North Penn School District, Lansdale PA   North Penn School District   Hatfield borough   Hatfield township   Lansdale bor...
North Penn School District, Lansdale PA   If this were New Jersey…                                 Property tax   North Pe...
North Jersey Public Policy Network“Creating Thriving Communities in Challenging Times”Tim Evans • New Jersey Future • Febr...
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New Jersey Future Regionalizing School Districts

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Property taxes in New Jersey are some of the highest in the nation, due in large part to the way the state funds its schools. This has significant land-use consequences: municipalities want higher-income residents in houses on larger lots because they cost less and bring fewer schoolchildren, and they want commercial development because the tax revenues are higher and the municipal costs are lower. These problems can be addressed by expanding the geography over which a school district has jurisdiction, so that costs and taxation are distributed more evenly.

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  • New Hampshire has no individual income tax
  • Number of school districts excludes special districts (for all 3 counties)Three Montco PA districts contain at least one muni in another county (Boyertown, Spring-Ford, Upper Perk; these actually bring the muni/district ratio closer to 3:1.Only 16.5% of Montgomery County MD pop lives in incorporated places (2008 pop estimates).
  • New Jersey Future Regionalizing School Districts

    1. 1. North Jersey Public Policy Network“Creating Thriving Communities in Challenging Times”Tim Evans • New Jersey Future • February 16, 2012
    2. 2. Median Real Estate Tax Bill (2010) New Jersey 6,828 Connecticut 4,903 New Hampshire 4,660 New York 4,090 Rhode Island 3,734 United States 2,043 Data source: 2010 American Community Survey
    3. 3. Over-Reliance on Property Tax Percent of Total State and Local Tax Revenue Derived From Property TaxNew Hampshire Vermont New Jersey Texas Rhode Island United States 0% 10% 20% 30% 40% 50% 60% 70% Data source: U.S. Bureau of the Census, 2007 Census of Government Finance
    4. 4. Basic Property Tax Facts• Schools represent the bulk of local government expenditures• Residential development doesn’t pay for itself, unless it’s age-restricted – RESULT: Nobody wants kids• Wealthy residents demand fewer services than poorer ones – RESULT: Large lots encouraged; multi-family housing discouraged• Commercial development does pay for itself – RESULT: Every municipality wants to be Teterboro
    5. 5. Over-Reliance on Property Tax : Why Is This a Land-Use Issue?• Incentive to zone out children [keep out housing if you can]• Large-lot/exclusionary zoning [keep out people who can’t pay their own way]• Competition for commercial development (the “ratables chase”) [generate revenue without school costs by attracting malls and office parks]
    6. 6. Over-Reliance on Property Tax : The Consequences• Downward spiral of disinvestment, wherein a declining tax base causes tax rates to rise, which then chases away the more prosperous residents and businesses, further depleting the tax base and leaving behind the neediest residents most in need of government services, necessitating another tax rate increase etc.• This creates a high-stakes system of winners and losers
    7. 7. Is It Really a Property Tax Problem?Many of the land-use side effects of the property tax system are actually more properly ascribed to NJ’s fragmented system of local governanceFrom a land-use perspective, tax reform might better be accomplished by increasing the geographic size of the units of competition: – Tax base sharing – Municipal consolidation – Regional school districts
    8. 8. 3 big counties, similar populations, dissimilar school systems number munis per 2010 number of of school school population municipalities districts districtBergen County NJ 905,116 70 75 0.933Montgomery County PA 799,874 62 23 2.696*Montgomery County MD 971,777 19* 1 NA• Three school districts in Montgomery County PA contain at least one municipality inanother county; counting these additional munis brings the muni/district ratio close to 3:1.• Only one in six residents of Montgomery County MD lives in an incorporated municipality.
    9. 9. North Penn School District, Lansdale PA operates all schools, K thru 12 2010 population North Penn School District: 97,957 Hatfield borough 3,290 Hatfield township 17,249 Lansdale borough 16,269 Montgomery township 24,790 North Wales borough 3,229 Towamencin township 17,578 Upper Gwynedd township 15,552
    10. 10. 2010 population 3 Bergen regional high school districts: 93,5021 PASCACK VALLEY REGIONAL (9-12) 33,4522 Hillsdale borough (K-8) 10,2193 Montvale borough (K-8) 7,8444 River Vale township (K-8) 9,6595 Woodcliff Lake borough (K-8) 5,7306 RAMAPO-INDIAN HILL REGIONAL (9-12) 40,0407 Franklin Lakes borough (K-8) 10,5908 Oakland borough (K-8) 12,7549 Wyckoff township (K-8) 16,69610 WESTWOOD REGIONAL (K-12) (a “true” regional) 20,010 Washington township 9,102 Westwood borough 10,908
    11. 11. Bergen County school system much more fragmented number of 2010 number of school population municipalities districtsNorth Penn School District 97,957 7 13 Bergen regional districts 93,502 9 10
    12. 12. Bergen County school system much more fragmented number of 2010 number of school population municipalities districtsNorth Penn School District 97,957 7 13 Bergen regional districts 93,502 9 10Woodbridge township 99,585 1 1
    13. 13. North Penn School District, Lansdale PA North Penn School District Hatfield borough Hatfield township Lansdale borough Montgomery township North Wales borough Towamencin township Upper Gwynedd township
    14. 14. North Penn School District, Lansdale PA North Penn School District Hatfield borough Hatfield township Lansdale borough Montgomery township – 1977: North Wales borough Towamencin township Upper Gwynedd township
    15. 15. North Penn School District, Lansdale PA If this were New Jersey… Property tax North Penn School District: rate change Hatfield borough ↑ LOSE Hatfield township ↑ LOSE Lansdale borough ↑ LOSE Montgomery township ↓ WIN North Wales borough ↑ LOSE Towamencin township ↑ LOSE Upper Gwynedd township ↑ LOSE
    16. 16. North Jersey Public Policy Network“Creating Thriving Communities in Challenging Times”Tim Evans • New Jersey Future • February 16, 2012
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