new jersey future regionalizing school districts

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Tim Evans • New Jersey Future • February 16, 2012 North Jersey Public Policy Network Creating Thriving Communities in Challenging Times

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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

Page 1: New Jersey Future Regionalizing School Districts

Tim Evans • New Jersey Future • February 16, 2012

North Jersey Public Policy Network“Creating Thriving Communities in Challenging Times”

Page 2: New Jersey Future Regionalizing School Districts

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

Page 3: New Jersey Future Regionalizing School Districts

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

Page 4: New Jersey Future Regionalizing School Districts

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

Page 5: New Jersey Future Regionalizing School Districts

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]

Page 6: New Jersey Future Regionalizing School Districts

• 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

Page 7: New Jersey Future Regionalizing School Districts

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?

Page 8: New Jersey Future Regionalizing School Districts

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.

Page 9: New Jersey Future Regionalizing School Districts

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

Page 10: New Jersey Future Regionalizing School Districts

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

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Page 11: New Jersey Future Regionalizing School Districts

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

Page 12: New Jersey Future Regionalizing School Districts

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

Page 13: New Jersey Future Regionalizing School Districts

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

Page 14: New Jersey Future Regionalizing School Districts

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

Page 15: New Jersey Future Regionalizing School Districts

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

Page 16: New Jersey Future Regionalizing School Districts

Tim Evans • New Jersey Future • February 16, 2012

North Jersey Public Policy Network“Creating Thriving Communities in Challenging Times”