Questions Reporters Need to Ask

Following is an email I sent to the AP reporter in Trenton. My goal is to plant the salient questions reporters should be asking about this so-called education funding reform.

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As you report on this, here are a couple of questions to keep in mind.

1. The governor talks about adjusting funding to accommodate those who “live in the wrong zip code.” That could be taken a number of ways. Does it mean that state aid to schools will be based on each individual child’s household income? If yes, it is just one more implicit admission that education funding ought to be based on income and not property taxes. And, if so, how will this affect a district like Middletown Twp? We get aid from Trenton of about fifteen to sixteen percent. That is because we are a so-called rich district due to some very wealthy sections of the township. Will Middletown begin to get substantial aid increases? I doubt it very much.

2. As you might know. Middletown borders Keansburg, an Abbott district. The part of Middletown adjacent to Keansburg is of the same socio-economic strata. Keansburg gets aid of what, 80%? 85%? I am not sure of the exact figure. But the point is that a person living on one side of the street with an identical house and income to their neighbor across the street in the other town has either an imputed greater or lesser ability to pay property tax based which side of the border of they live. Is this fair? How will Corzine’s plan address that huge inequity.

3. Lastly, assuming Middletown will reap some sort of increase in aid, how much and how meaningful will it be? Corzine indicated there may be around a $500 million increase in education spending? Middletown’s education budget is somewhere over $110 million a year (I don’t know exactly, I have given up wasting my time paying attention other than always voting no on the budget). The taxpayer covers well over $80 million of it. (trying to be conservative with figure so I am not accused of exaggerating).

In Middletown, around 65% of the property tax bill goes to education. That means of the typical $6,300 tax bill, over $4100 is for the schools. What would constitute substantial tax relief? A $1,000 reduction? That, it seems to me, is the bare minimum. To do that it would take an additional $20 million from Trenton to achieve that number. With only $500 million available and 600 districts vying for the money, it is doubtful that level of aid would or could ever happen.

Furthermore, even if it did happen, how would it affect the taxpayers bottom line? The 25% decrease in their education portion of the tax bill will only translate into a little more than 15% overall property tax reduction. This is peanuts. This would only be returning people to where they were two or three years ago. And, keep in mind, this is a fantasy, best case scenario.

So, I hope you keep these points in mind as you question Lilo [former Gannett reporter and the governor's press spokesman] as well as legislators. These are the real bottom line questions. Don’t let them gloss over the reality with zip code distractions.

ZIP code Duplicity

Governor Corzine has a plan to revamp education funding. It appears to be just more smoke and mirrors. The sales pitch is “the current model leaves too many children out of luck simply because they live in the wrong ZIP code” Pithy, but meaningless as far as the overburdened property taxpayer is concerned.

Two of the many problems with the plan are the continued reliance upon using a community’s aggregate wealth to determine aid and thinking $400 million to $500 million in increased aid will begin to make a dent in sky-high property taxes. And that is what is driving this so-called reform.

The idea that low income students living in a wealthy district merit less aid than those in a poor district reveals the inherent contradiction of a needs-based plan governed by a community’s average income. Why should a needy student be penalized because he lives in the wrong ZIP code? Wait, isn’t that what is driving the governor’s thinking? How can he say he is helping those who live in the wrong ZIP code when he is penalizing an otherwise identical child because he lives in the wrong ZIP code? Confused? Our leaders depend upon us not thinking too deeply about these things.

The governor promises more education aid. But he has also guaranteed Abbott districts will not see reductions in aid and might even see an increase. Using $450 million and dividing by 600 districts, you get $750,000 each. That would be 0.6% of the Middletown Twp. education budget and 0.4% of the entire property tax bill. Anymore need to be said? You can contact me after I return from my round the world cruise courtesy of these huge property tax savings.

The real problem with high property taxes is they have nothing to do with ability to pay. Education must be supported entirely by the state with a dedicated income tax. Then funding based on individual student needs would be based solely upon those criteria and it would not matter which ZIP code one lives in.

And do not forget that even if the education portion of property taxes were eliminated we would still be at the same level of local property taxation as existed about ten years ago. Were you satisfied with what you paid then? Have your wages increased so much that this amount will now be a minor nuisance? Hah! I thought not. Don't be duped. We must eliminate the property tax for all things, not just education. Stop subsidizing your wealthy neighbors tax obligation.

Is bringing "tax equity" code for class warfare?

In a recent conversation with a N.J. senator, one reason given as to why eliminating the property tax and replacing it with an income tax cannot be done is that it could be construed or actually become class warfare. The concern is that the so-called rich would be unfairly targeted to pay more taxes than their fair share for no other reason than that they are rich. So, to legislate based on such motivation is not right and would be divisive.

If that were the case, I would agree. We should not unfairly target one class of people based simply on who they are or what they have. But this is not the case here. In fact, the reverse is what is the de facto situation in New Jersey.

The property tax is inherently skewed against middle, low and no income taxpayers. In actuality, in an ever-increasing degree, it inordinantly benefits those have the greater income.

In fact, the property tax system does exactly what the decryers of class warfare ostensibly are against: The property tax automatically causes those of a certain class to pay an unfair share of the tax burden. It targets those at the bottom. The less income you have, the greater percentage of that income goes to the property tax.

For example, the person with an income of $60,000 paying $6,000 in property taxes has an effective tax rate of ten percent. The person making $120,000 and paying $6,000 in property taxes has an effective rate of five percent. The person making $360,000 and paying the same $6,000 in property taxes is paying a measley TWO percent rate. Compare that with the retiree with $30,000 income who has an effective tax rate of TWENTY percent. That is ten times the so-called wealthy taxpayer.

There is already class warfare going on, and it is against those at the bottom, not those at the top. The demand for equity to be brought to the system is not based on some Marxist notion that the rich are inherently evil and automatically worthy of contempt. It is based on the biblical and basic American ideal of treating all equally and fairly, of not favoring one class of people over another. The property tax favors the wealthy at the expense of those less well off.

(I have not factored in how abuse of the farm assessment--something only possible for the wealthy--exacerbates the disparity even more; it is fodder for an entire post.)

We must put a stop to the class warfare against those least able to afford it.

End the Property Tax and restore fairness and equity to how we pay taxes.