Christie's Cuts May Push New Jersey Property Tax Up 8%, State Senator Says

New Jersey property tax bills, the highest in the U.S., may rise an average of $600 to make up for Governor Chris Christie’s proposed cuts in school and municipal aid, the state Senate budget committee chairman said.

Towns and schools may boost taxes as much as 8.2 percent as they seek to replace lost funding, Senator Paul Sarlo, a Democrat from Wood-Ridge, said at a hearing in Trenton today. The average property levy was $7,281 last year, according to state data.

“This is going to be a seismic shift onto property taxes,” Sarlo said in an interview. “They are being asked to shoulder a larger burden this year.”

Christie, 47, a Republican who took office Jan. 19, seeks to close a $10.7 billion deficit without raising taxes. His $29.3 billion spending plan would lower state aid to education by $820 million and trim municipal aid by $445 million.

Sarlo’s projection “would be true” if schools and local government “choose not to do what they need to do in the current fiscal environment -- cuts and finding ways to be efficient,” said Michael Drewniak, a spokesman for the governor. “We know it will be difficult but if the state can do it, it can be done.”

New Jersey voters, stung by rising real estate levies and the worst recession since the 1930s, defeated a record 59 percent of school budgets earlier this month. Rejected plans go to local governing bodies that will decide if additional cuts are needed.

Tax Cap

Sarlo’s projected increase may exceed a 4 percent cap on school- and municipal-tax growth enacted in 2007, he said. That law contained a provision allowing schools and towns to go beyond the limit to replace state aid cuts. Christie has said he’d make dollar-for-dollar reductions in funding to towns that go over the cutoff.

Governments will need to be creative and find savings by firing workers, eliminating programs and sharing or consolidating services, Lori Grifa, acting commissioner of the Department of Community Affairs, told Sarlo’s committee.

“We’re asking these entities to control their spending just because the state’s not in a position to send the monies that we have in the past,” Grifa said.

New Jersey’s tax bills went up an average of 3.3 percent last year, the smallest jump since 1999, Grifa’s agency said in February. Property taxes are New Jersey’s primary source of funds for schools and local government.

Christie plans to seek a constitutional amendment to cap future property tax increases at 2.5 percent, with little or no room for exemptions, Drewniak said.

To contact the reporter on this story: Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net

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