Thursday, May 04, 2006

A New Old Way To Tax New Jersey Property

From the Star Ledger:

A 2-tiered solution to the property tax plight

A regional planning group looking at ways to overhaul the state's property tax system says the best idea is one that dates back more than a century: a two-tiered system that would impose higher taxes on land than buildings.

The Regional Plan Association said the system would discourage sprawl, encourage affordable housing and protect the autonomy of municipalities.

Alexis Perrotta, co-author of the 23-page report, claims it would stop sprawl in it tracks because it would put a premium on taxing land.

"It doesn't cost you any more to build up. But it costs to build out," Perrotta said.
...
With New Jersey officials contemplating a major property tax overhaul, perhaps as early as this fall, the commission evaluated several broad reforms mostly aimed at school tax burdens, which make up the lion's share of property tax bills.

Other ideas include varying the school property tax by state planning area, adopting a single school tax rate for the entire state, consolidating all school districts at the county level and charging one county rate, and replacing half the school tax bill with an income tax surcharge.
...
Assemblyman Louis Greenwald (D-Camden), chairman of the Assembly Budget Committee, said the idea of a two-tiered tax system, first suggested in 1879 by economist Henry George, is "interesting on its face" but needs more review. "We are at a crisis point and we have to start to address alternatives," he said.

25 Comments:

Blogger Rob Ryley said...

"A regional planning group looking at ways to overhaul the state's property tax system says the best idea is one that dates back more than a century: a two-tiered system that would impose higher taxes on land than buildings."

Perhaps I'm missing something, but exactly how does this tax discourage development and "sprawl"? If you have undeveloped land, are you going to have higher taxes than if it were developed?

5/04/2006 05:23:00 AM  
Blogger Metroplexual said...

I have not seen this proposal but find it interesting because it would hit my part of the state which already has a complex of being picked on. NW jersey for those who do not know is politically conservative and people up this way think the highlands law is aimed at them because they are conservative. This proposal would just seal the deal.

I know this regional planning group. They are the oldest in the region. I have had many meetings with their director. He was fully behind the highlands bill. Now he wants to raise taxes for the transportation trust fund.(certainly a good thing)

I have an idea where they might go after. Right now farmers with large tracts pay very little in property taxes on the portion of land used for farming. This can be a forest that generates as little as $500/yr with as little as 5 acres. Many of these farmers sell cord wood to their brother in law, just like C. T. Whitman does.

5/04/2006 06:22:00 AM  
Blogger grim said...

The repercussions of this will be very interesting.

At first glance, it seems that this would encourage McMansion-on-a-postage-stamp development.

As unsightly as that might be, it would be a more efficient use of land. I think there are better ways..

I'm for high density development. I think it's smart growth. I'd rather see a mid to high rise condo buildings with underground parking, surrounded by a few acres of wooded of parkland than a new subdivision of .17 acre lot SFH's.

Yes, these are the kinds of things I think about when I lay in bed at night.

grim

5/04/2006 06:39:00 AM  
Blogger Metroplexual said...

I think about traffic....alot.

quote from the movie "Singles".

Sounds like you would be a good urban planner.

5/04/2006 06:45:00 AM  
Blogger minutesfromNYC said...

Off topic, but "Singles" was a great movie! Ahhh...the 1990's...when real estate was "normalized"

5/04/2006 06:54:00 AM  
Blogger Shailesh Gala said...

Metro: Does Highlands Bill Help or Hurt majority of folks in NW NJ? My understanding is that by restricting development near water areas, it will restrict development. I understand, most folks who own farms want to keep it that way, as they love farming and want to preserve land as farm land.

I read RPA's plan. I think they have mentioned many other ideas as well. I think the News Paper at times blow up some ideas more then others.

Grim - I agree with your development thought process ideas. IMO, Any plan that lets more choices for home buyers is good idea.

Having done lot of Grass root lobbying in past (mainly in Washington), I feel, we all should frame our collective opinion for NJ development and send that to legislators & governer. With Email it is very easy to send messages anyway. At the least, it will open the debate.

5/04/2006 08:05:00 AM  
Blogger pesche22 said...

mills refis the debt. and lines the company for sale.

watch the nj taxpayers take it in the shorts on this one.

only a matter of time.

5/04/2006 08:30:00 AM  
Blogger Metroplexual said...

SG,

IMO the highlands was a taking, which is unconstitutional. No compensation mechanism has been proposed yet. Many farmers have their wealth tied up in the value of the land, if they can't develop it they are stripped of their wealth. Farming is not a road to wealth in this state, many farmers have other jobs they do just to make ends meet. Many were counting on it for retirement and their childrens' educations now they've got bupkiss and empty words from bureaucrats.

5/04/2006 08:38:00 AM  
Anonymous Anonymous said...

Metro... what you say is true... but farmers have received quite nice coin throughout the years from the fed and state.

5/04/2006 08:48:00 AM  
Blogger Metroplexual said...

That is because the free market and farming don't mix. Subsidizing them keeps them in business, but agribusiness with their economies of scale still get subsidized as well.

5/04/2006 08:55:00 AM  
Anonymous Anonymous said...

Metro... that's not my point... my point is the farmers have been paid very nice coin from the government already... so... i really don't cry a river for them.

5/04/2006 09:28:00 AM  
Blogger Metroplexual said...

I dont disagree with your statement. But apparently the "coin" payments have been part of the political will of the country.

5/04/2006 09:34:00 AM  
Blogger Shailesh Gala said...

Metro: I support your opinion on Highlands. State should not take away land rights, and at the least not in the way it was done in NJ. I can only understand if there was dire need, which I don't see at this point and only with just compensation. Dem's got this one wrong.

I wrote to Bruce Katz about the presentation he gave this week. His associate Robert Puentes, sent me the presentation. Here is the link.

http://www.brookings.edu/metro/speeches/20060501_Trenton.pdf

He wrote: Thanks for your interest in this work and for the advice on the blog. Actually, in the course of this project we did come across it and read it fairly regularly. The themes voices there are very consistent with our work and with the tenor of the discussion we heard quite clearly throughout the state.

Please take a look and do let me know if you have any questions or comments on this.


I liked so far what I saw. I personally think development with view toward better society is better than development with large inequalities. The more inequality will generate more animosity and tension. Also, bear in mind we are competing now globally. If Tech workers in NJ are expensive, it is become all the more easy to outsource to India or China. High cost of housing, high salaries will fasten the move.

Grim: It would be great if you could post this as separate thread and get opinion from all folks on this blog. We can send comments to both Bruce & Robert.

5/04/2006 09:37:00 AM  
Anonymous Anonymous said...

no reason to bring poltics in... the farmers have been receiving "coin" from fed and state for years, in some cases generations.

5/04/2006 09:45:00 AM  
Blogger Metroplexual said...

Anon, it is not politics but the will of the people.

SG,

It looks like alot of the same info that NJFuture's report had. Thanks for the link.

5/04/2006 10:15:00 AM  
Blogger chicagofinance said...

Metroplexual said...
I think about traffic....alot.
quote from the movie "Singles".
Sounds like you would be a good urban planner.
7:45 AM


Super Train
Xavier McDaniel

5/04/2006 11:38:00 AM  
Blogger Metroplexual said...

I am the Super Train guy.

5/04/2006 12:06:00 PM  
Blogger chicagofinance said...

Steve - I think you're wigging.

5/04/2006 12:45:00 PM  
Anonymous Anonymous said...

"Assemblyman Louis Greenwald (D-Camden)..... "We are at a crisis point and we have to start to address alternatives," he said."

Translation - we have a budget gap, and we wont dream of cutting our own expenses, so we have to figure out another way to steal from the taxpayers."

5/05/2006 05:23:00 PM  
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