new jersey future regionalizing school districts
DESCRIPTION
Property taxes in New Jersey are some of the highest in the nation, due in large part to the way the state funds its schools. This has significant land-use consequences: municipalities want higher-income residents in houses on larger lots because they cost less and bring fewer schoolchildren, and they want commercial development because the tax revenues are higher and the municipal costs are lower. These problems can be addressed by expanding the geography over which a school district has jurisdiction, so that costs and taxation are distributed more evenly.TRANSCRIPT
Tim Evans • New Jersey Future • February 16, 2012
North Jersey Public Policy Network“Creating Thriving Communities in Challenging Times”
New Jersey 6,828
Connecticut 4,903
New Hampshire 4,660
New York 4,090
Rhode Island 3,734
United States 2,043
Median Real Estate Tax Bill (2010)
Data source: 2010 American Community Survey
Over-Reliance on Property TaxPercent of Total State and Local Tax Revenue Derived
From Property Tax
Data source: U.S. Bureau of the Census, 2007 Census of Government Finance
0% 10% 20% 30% 40% 50% 60% 70%
United States
Rhode Island
Texas
New Jersey
Vermont
New Hampshire
Basic Property Tax Facts
• Schools represent the bulk of local government expenditures
• Residential development doesn’t pay for itself, unless it’s age-restricted– RESULT: Nobody wants kids
• Wealthy residents demand fewer services than poorer ones– RESULT: Large lots encouraged; multi-family
housing discouraged
• Commercial development does pay for itself– RESULT: Every municipality wants to be
Teterboro
Over-Reliance on Property Tax :Why Is This a Land-Use Issue?
• Incentive to zone out children [keep out housing if you can]
• Large-lot/exclusionary zoning [keep out people who can’t pay their own way]
• Competition for commercial development (the “ratables chase”) [generate revenue without school costs by attracting malls and office parks]
• Downward spiral of disinvestment, wherein a declining tax base causes tax rates to rise, which then chases away the more prosperous residents and businesses, further depleting the tax base and leaving behind the neediest residents most in need of government services, necessitating another tax rate increase etc.
• This creates a high-stakes system of winners and losers
Over-Reliance on Property Tax :The Consequences
Many of the land-use side effects of the property tax system are actually more properly ascribed to NJ’s fragmented system of local governance
From a land-use perspective, tax reform might better be accomplished by increasing the geographic size of the units of competition:– Tax base sharing– Municipal consolidation– Regional school districts
Is It Really a Property Tax Problem?
3 big counties, similar populations, dissimilar school systems
2010
populationnumber of
municipalities
number of school
districts
munis per school district
Bergen County NJ 905,116 70 75 0.933
Montgomery County PA 799,874 62 23 2.696*
Montgomery County MD 971,777 19* 1 NA
• Three school districts in Montgomery County PA contain at least one municipality in another county; counting these additional munis brings the muni/district ratio close to 3:1.
• Only one in six residents of Montgomery County MD lives in an incorporated municipality.
North Penn School District, Lansdale PA
2010 population
North Penn School District: 97,957
Hatfield borough 3,290
Hatfield township 17,249
Lansdale borough 16,269
Montgomery township 24,790
North Wales borough 3,229
Towamencin township 17,578
Upper Gwynedd township 15,552
operates all schools, K thru 12
2010 population
3 Bergen regional high school districts: 93,502
PASCACK VALLEY REGIONAL (9-12) 33,452
Hillsdale borough (K-8) 10,219
Montvale borough (K-8) 7,844
River Vale township (K-8) 9,659
Woodcliff Lake borough (K-8) 5,730
RAMAPO-INDIAN HILL REGIONAL (9-12) 40,040
Franklin Lakes borough (K-8) 10,590
Oakland borough (K-8) 12,754
Wyckoff township (K-8) 16,696
WESTWOOD REGIONAL (K-12) (a “true” regional) 20,010
Washington township 9,102
Westwood borough 10,908
1
2
3
4
5
6
7
8
9
10
Bergen County school system much more fragmented
2010
populationnumber of
municipalities
number of school
districts
North Penn School District 97,957 7 1
3 Bergen regional districts 93,502 9 10
Bergen County school system much more fragmented
2010
populationnumber of
municipalities
number of school
districts
North Penn School District 97,957 7 1
3 Bergen regional districts 93,502 9 10
Woodbridge township 99,585 1 1
North Penn School District, Lansdale PA
North Penn School District
Hatfield borough
Hatfield township
Lansdale borough
Montgomery township
North Wales borough
Towamencin township
Upper Gwynedd township
North Penn School District, Lansdale PA
North Penn School District
Hatfield borough
Hatfield township
Lansdale borough
Montgomery township – 1977:
North Wales borough
Towamencin township
Upper Gwynedd township
North Penn School District, Lansdale PA
North Penn School District:Property tax rate change
Hatfield borough ↑
Hatfield township ↑
Lansdale borough ↑
Montgomery township ↓
North Wales borough ↑
Towamencin township ↑
Upper Gwynedd township ↑
WIN
If this were New Jersey…
LOSE
LOSE
LOSE
LOSE
LOSE
LOSE
Tim Evans • New Jersey Future • February 16, 2012
North Jersey Public Policy Network“Creating Thriving Communities in Challenging Times”