Just across the Hudson from New York City lies Hoboken, New Jersey, a 2 square mile city of about 40,000 people. Once a thriving port, the city after World War II suffered through failed urban renewal and crime until recent years, when it once again became a thriving community where people (especially commuters to Manhattan) want to live.
Unfortunately, the city’s government ratcheted spending up with the real estate boom, with the budget rising 126% over seven years. Even before the Wall Street collapse and the general fall-off in taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. revenue, Hoboken last June found itself unable to balance its budget due to the unsustainable spending growth. The state of New Jersey responded by taking over city operations.
Property taxes always seem to be Americans’ least favorite tax, primarily because it is so visible. While it may not seem like it when we’re writing the check, property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. es are better than other taxes because they enable local control and make it harder to shift tax burdens to other people. Because of this, it’s difficult to demand more government services than citizens are willing to pay for.
Hoboken residents are learning this all too well now that the state has total control over their property tax rates, since they just raised them by an astonishing 47 percent. Crowds of residents have swarmed municipal meetings to denounce the moves, but the City Council conveniently blames the state, which in turn blames the city. There’s talk of declaring bankruptcy, as some cities and counties have, as the best way to clean up the city’s finances and finally addressing spending.
Before, Hoboken’s Hudson County was 14th in the nation for high property taxes. How much higher will they be now?
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