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Hopefully this isn't a dumb question. I'm a New Yorker currently looking for a home in NJ. I've noticed that for many of the properties I'm looking at, the property tax has increased sharply over the past few years. I remember reading that Gov. Christie imposed a 2% cap on property tax increases, so I'm wondering how the increase can be so dramatic in some places.
Hopefully this isn't a dumb question. I'm a New Yorker currently looking for a home in NJ. I've noticed that for many of the properties I'm looking at, the property tax has increased sharply over the past few years. I remember reading that Gov. Christie imposed a 2% cap on property tax increases, so I'm wondering how the increase can be so dramatic in some places.
Christie didn't impose the 2% cap. He and the legislature worked on it. The legislature passed it and Christie signed it.
Now for the answer as to how increases can still be so high. The 2% property tax cap is a joke. First, it only covers the municipal portion of property taxes. The county and school taxes, along with a small open spaces portion, make up the bulk of property taxes in most municipalities in New Jersey. Second, the 2% cap included its own seeds of destruction. It allows exemptions by referendum for ALL of the very issues that lead to higher property taxes in the first place. So, if a municipality wants to exceed the 2% cap and voters approve the increase taxes still go up.
The tax cap was a political ploy. Don't fall for it. My property taxes went up over 7% total this year alone and over $3,000 over the past six years.
As bob said, the "cap" is a joke because it excluded the most common items that would relate to a tax increase. Even then, with a simple referendum vote the cap can be exceeded. I haven't heard of one referendum not passing since the "cap" was put in place.
Just tax increases. If they can "creatively" spend the money via accumulating debt, they have no restrictions.
its a funny concept to cap revenue but not expenses. people need to start looking at debt as a tax. either that or dont allow government to take on debt.
Great post! Even if the cap was successful it would be 2% a year increase and that would be a lot. 2% x 10 years is more than 20% as each year the increase compounds. Remember this is how savings accounts would work. I really don't know were this is all going? All I know is it is just too much for me.
Well my Northern Jersey town kept the tax increases to 2% or less in the last three years that I checked. That is a lot less than a $50 monthly rent increase that I usually had when we were renting...
Not sure why you say that a referendum to raise taxes above 2% will always pass. After all, people will essentially be voting to tax themselves...
Overall, I think having an imperfect cap is much better than having no cap at all.
Well my Northern Jersey town kept the tax increases to 2% or less in the last three years that I checked. That is a lot less than a $50 monthly rent increase that I usually had when we were renting...
Not sure why you say that a referendum to raise taxes above 2% will always pass. After all, people will essentially be voting to tax themselves...
Overall, I think having an imperfect cap is much better than having no cap at all.
People have short memories. Before the cap my taxes went up 6% every year. Now they stick to 2%. There was one year they went over the 2%, but that's no big deal compared to the old system. This cap may not be perfect, but it is better than nothing. And I specifically remember Christy wanted a hard cap, but the legislature wouldn't pass it until it got watered down, so I don't think they should get credit for any of it.
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