NJ Out of Line in School Spending, Funding

August 16th, 2002 by Tim Evans

New Jersey spends more per pupil for elementary and secondary school education than any other state in the country: $10,283, according to the latest Census Bureau data for 2000. New York, at $10,039, also topped the $10,000 per-pupil mark.
In New Jersey, the bulk of this funding (about 60 percent) comes from local governments, mainly through property taxes. State government is a secondary source of school funding.
Nationally, the opposite is true. State governments lead school funding, contributing $186 billion toward public elementary and secondary school education in 2000, followed by local governments at $161 billion.
Federal contributions to local school spending account for about three to four percent of New Jersey’s total, compared with about six to seven percent nationally, because of New Jersey’s higher relative wealth.

(Sources: U.S. Census and the Legislative District Data Book, published by the Center for Government Services at Rutgers University).

Local Communities Push for Property Tax Reform

New Jersey leads the class when it comes to spending per pupil, and in over-reliance on local property taxes to get the job done.

The consequences are severe. New Jerseyans pay the highest property taxes in the nation. School districts with the greatest needs are limited in their ability to help themselves, because often they have the lowest property values. All communities are forced to chase and compete for new development when they need additional tax funding, even when that development doesn’t fit the community’s character or vision, adds to local traffic and erases farmland and open land.

Now, New Jersey communities have decided to push for change. With the failure of the State Legislature this spring to act on a constitutional convention for tax reform, towns in counties from Hunterdon to Essex to Cumberland are launching their own efforts to ask residents on Nov. 5 whether they want a constitutional convention to reform property taxes. The push, sponsored by the New Jersey League of Municipalities, is designed “to demonstrate to state officials that maybe there’s more of a liability in not doing anything,” the League says. Towns have until Aug. 23 to request the question be put to local voters on the November ballot. Supporters hope the results will prod a statewide vote in November 2003. While there are some legal questions to be resolved in offering these local referenda, there is no question about the growing grassroots demand for property tax reform.

Shifting the school burden away from local property taxes has multiple benefits. Statewide funding for schools would spread the school burden over the widest possible population, eliminating the unfair burden on today’s poorest communities – and the need for “bailouts” by the state when local resources fail to meet school needs.

A convention may seem radical, but regular routes clearly aren’t fixing the property tax problem. A constitutional convention appears to be New Jersey’s best option for changing a property tax system that works against schools and the prosperity of New Jersey’s future.