New Jersey Senate President Predicts Property Tax Increase Despite Cap

New Jersey homeowners, already bearing a tremendous property tax burden, will not be happy to hear the recent prediction from Senate President Stephen Sweeney: He expects property taxes to rise by more than two percent next year.

From the Star-Ledger:

Senate President Steve Sweeney told the New Jersey Business and Industry Association that businesses and homeowners can expect increases greater than 2 percent unless the economy improves dramatically. A stagnant economy means local governments collect less in taxes.

“If the economy turns around and you have growth in your tax base, you should be able to cover your costs,” Sweeney said. “The problem is, I don’t see growth in the economy.”

…

The Legislature approved and Gov. Chris Christie signed a 2 percent cap on property tax growth this year. Pension and health care costs are exempt. Those costs have been rising at double-digit rates per year.

County, local and school officials who will be forced to create a budget within the cap or seek voter approval to exceed it will face tough choices, including layoffs and service cuts, Assembly Speaker Sheila Oliver said.

“The 2 percent property tax cap will restrain and constrain the growth of property taxes at the local level,” she said. “It will not necessarily reduce property taxes.”

In 2009, New Jersey has the highest property taxes of any state by three different measures: dollar amount paid, as a percentage of home value, and as a percentage of income.

More on property taxes:

Data
• Property Taxes on Owner-Occupied Housing, by County, 2005 – 2009, Ranked by Property Taxes Paid

• Property Taxes on Owner-Occupied Housing by State, 2004 – 2009

• Property Taxes on Owner-Occupied Housing by County, 2005 – 2009, Ranked by Taxes as Percentage of Home Value

• State Business Tax Climate Index–Property Tax Index, 2006 – 2010, October 26, 2010

Podcast
• Kail Padgitt of the Tax Foundation: Sales Taxes, Property Taxes & Tax Revenue Sources, September 15, 2010

Study
• Property Tax Revenue Increased As Property Values Fell