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January 20, 2020

Property Tax Increase Blocked In New Jersey

New Jersey school districts were about to raise funds by raising property taxes, but the governor blocked it. The districts will have to find another way to compensate for the cuts that have taken place to state funding. When vetoing the bill, the governor made a statement that taxes on the wealthy should be raised to pay for schools, instead of asking middle-class taxpayers to pay more. Some districts have lost state aid, due to changes to the formula for school property tax funding.

If the measure would have passed without veto, it would have allowed school districts to exceed the two-percent cap on New Jersey property tax increases that were previously set. But Governor Murphy made it clear that he would not support the development of another way to exceed the cap, especially when it increases the burden of property tax and harms voters. The current school funding formula for the state tells voters how much every district should be spending, how much comes from the state, and how much should be generated from property taxes.

The funding formula has been in overhaul mode for years, and those changes have been controversial. The goal of the changes has been to shift state aid away from overfunded districts and to districts that are not funded as well. But at the same time, hundreds of millions more are being put into schools every year, and every district should get 100 percent of what is owed to them. There are 172 districts that will lose state aid, because they have been getting more than the current formula states that they need.

For the last seven years, there have been other districts that are losing money and not receiving enough funding. Programs reductions, budget cuts, and layoffs are part of the future for those districts, if changes to the distribution of state education funds are not made. By exceeding the two-percent property tax cap, these schools could get more funding and reduce their chances of ongoing financial problems. There would have been 40 districts that qualified for the changes. Still, the governor vetoed the bill and strongly suggested that districts find another way to address the issues. The goal is to avoid increasing how much families pay in property taxes, and it is a decision that should be taken seriously.

The governor continues to propose raising the tax on wealthy people, but defenders of the original bill argue that none of the money from an increase on wealthy people’s taxes would actually go to the districts that need the funding. According to the New Jersey School Board Association, the governor is also mistaking the bill’s actual effects. That Association states that the bill was thought out carefully, and would have helped school districts without causing the significant and unrestricted increases in property taxes the governor implied.

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