Sussex County residents get more bang for their big tax buck How to lower taxes remains the issue

BY JOSEPH PICARD
New Jersey homeowners face some of the highest property taxes in the nation, yet it may be something of a consolation to Sussex County residents that they get more bang for their tax buck than all but one of the state’s other counties.
At least that is the conclusion reached by the analysts at SmartAsset, a New York-based financial technology company, which recently released its second annual study on property taxes.
According to the study, county homeowners pay a median annual property tax of $6,722. That’s on a median property value of $285,000. The average tax rate is 2.35 percent. All of these figures fall more or less in the middle of what the state’s 21 counties are paying.
The SmartAsset study, however, also factors in school rankings and crime rates, as well as property taxes, for each county. With this methodology, Hunterdon County comes out on top for what residents get in return for their tax dollars, and Sussex County comes in second.
According to AJ Smith, vice president of Content at SmartAsset, where the state’s annual crime rate is 2,174 violent or property crimes per 100,000 people, the Sussex County crime rate is 1,028 per 100,000.
“The state’s school rating is 6 on a basis of 10,” she said. “Sussex County’s school rating is 9.”
The report’s figures were derived from U.S. Census, FBI and Department of Education statistics.
“It’s a compliment to our county government and the people who manage taxpayers’ money that Sussex County ranks high in bang for the taxpayer buck,” said Rep. Scott Garrett (R-N.J.), who represents the state 5th Congressional District, which covers a large portion of Sussex County. “They deserve credit for efficiently spending taxpayer money.”
Garrett nonetheless noted the high taxes endured by county residents and all New Jerseyans.
“People often ask me why we send so much money overseas when we have so many things that need attention here at home,” Garrett said. “And I often ask why New Jersey sends so much money to other states when we have so many needs right here. That’s why I’ve introduced legislation to let more people keep their hard-earned money in their pockets.”
In 2013 Garrett introduced the STATE Act and the LEARN Act, both aimed at keeping money in the start and out of federal coffers.
The Surface Transportation and Taxation Equity (STATE) Act seeks to address the nation’s insolvent transportation program and end the taxpayer bailouts of the Highway Trust Fund. The act would allow states to opt out of the federal transportation program and forgo their transportation allocations. In return, states would be allowed to keep the 18.4 cents per gallon federal gasoline tax within their borders. This, according to Garrett, would empower state and local officials, and increase state resources without any additional cost to the taxpayer.
The Local Education Authority Returns Now (LEARN) Act would give states the option to opt out of No Child Left Behind. In return, the federal government would provide taxpayers of the opt-out state a tax credit, thereby keeping money in the pockets of taxpayers instead of sending it to Washington, D.C. This method, according to Garrett, would cut the authoritative and financial strings of the federal government so that state and local governments could set their own educational standards while ensuring maximum parental involvement.
Garrett added that, to effectively address the problem of high taxation, reform of the federal tax code is needed.
“Tax reform is essential, to close loopholes and end corporate welfare, and to make the tax code understandable and fair,” he said.
Thomas Russo, Newton’s town manager, said local property taxes can also be unfair.
“One third of Newton’s tax base is exempt from taxes,” Russo said. “We manage our budget well, but when one in three don’t pay taxes, the burden increases on the rest of us.”
Russo explained that county buildings – Newton is the Sussex County seat – are exempt, as are the local college, schools, the hospital, social services and houses of worship.
“I understand that institutions like the hospital provide a vital service,” he said. “But the service is provided to people throughout the county and beyond, yet Newton takes it on the chin for having the hospital here.”
He added that hospitals are tax-exempt because they were once nonprofit institutions, but that is no longer the case.
In 2014, Russo, with the support of the local governing body, sent a letter to the exempt institutions in town, asking them in the name of fairness to pay the municipal portion of the tax bill or at least a part thereof.
“We did not get a favorable response,” Russo said. “No one agreed to pay anything. But at least we made our point.”
Regarding New Jersey’s overall high taxes, Russo said the driver is how education is funded.
“The bulk of property taxes goes to education,” he said. “Until we change how we fund education in New Jersey, nothing will change regarding high taxes.”
State Sen. Steve Oroho, Assemblywoman Gail Phoebus and Assemblyman Parker Space, all Republican lawmakers representing Sussex, Warren and Morris counties in Trenton, issued a statement when asked about the SmartAsset report.
“It should be no surprise that taxpayers in Sussex, Morris, and Warren Counties are in the top six of counties who get more bang for our property tax buck, as local officials in our towns and counties run government as efficiently as possible," the state lawmakers said.
“That being said, property taxes are way too high and our residents deserve relief. School funding is the central nervous system of the property tax goliath – in some of our municipalities accounting for upwards of 75 percent of their property tax bill.
“To fix school funding, we have called for the adoption of a constitutional amendment and legislation to establish the Fair School Funding Act (SCR-35/ACR-46/S-569/A-715) which would get the courts and their costly mandates out of school funding and overturn the Democrats’ inequitable funding formula created in 2008. This would allocate state education aid on a per pupil basis no matter where the child lives and would increase the amount of State aid that flows to our school districts, allowing localities to lower their property tax rates.
“In addition, we have introduced bi-partisan legislation to require a minimum geographic cost adjustment for school districts in all counties (S-480/A-3579). This anomaly in the funding formula called the geographic cost factor punishes schools in rural areas. When the governor tweaked the geographic cost factor in 2013, our legislative district received a 4.3 percent increase in funding, the largest out of any district in the state. Enacting this legislation would ensure that increase stays permanent,” the lawmakers stated.
Smith said SmartAsset produces the annual study for all 50 states, to help people make informed decisions about where they may want to live.
“Some people say, taxes are too high we’re not moving there,” she said. “But others look for what that tax dollar gets them. That’s where our study can help.”
Go here for the New Jersey section of SmartAsset’s property tax study.