The depressing truth about taxes & Teaneck

What is the ultimate source of frustration when it comes to taxes and spending in Teaneck politics? Yes, local taxes are almost exclusively the responsibility of residents, whether they are shouldering 85%, 86%, or 88% of the municipal burden. Taken alone, however, the proportion of revenues collected from a particular group says little about the sustainability of the current situation. To take an extreme example, if the municipal and school budgets were 50% smaller than they are today, the fact that almost all of the funding for those budgets comes from residential property taxes would hardly be troubling.

Clearly it is the combination of the size of the budgets and the source of the funds that causes the difficulties. This self-evident fact provides little help in finding a solution. Some residents cringe at the prospect of reducing the size of municipal and school budgets, fearing the loss of programs they hold hold dear or the abandonment of policies they ardently support. Others are more than willing to see expenditures cut, whether due to their belief in the inherent inefficiency and wastefulness of government, their perception that they do not personally benefit from much public spending, or their preference to hold onto the money demanded of them. Still others observe the situation and ask: why is a nice suburban town with many relatively well-off residents like Teaneck forced to take such tough decisions? Why isn't there more than enough money to go around without the residents feeling put upon? Why does Teaneck, with so much going for it, appear to be struggling just as much, if not more, than other municipalities with less to recommend them?

It might be objected that Teaneck is not really struggling any more than any other heavily taxed, resource constrained community. For every Secaucus, expanding already generous services without asking for greater tax contributions in return, there are dozens of New Jersey towns forced to choose between offering less or asking taxpayers for more, when neither option is at all attractive. A recent forum hosted by State Senator Loretta Weinberg, Assemblyman Gordon Johnson, and Assemblywoman Valerie Vainieri Huttle (covered in this week's Suburbanite) bears this out. Teaneck just has more than its share of vocal complainers, for whatever reason.

While there may be a grain of truth to this, a set of figures often cited by challengers for Congressional seats in New Jersey argues that Teaneck is particularly poorly positioned when it comes to taxes.

As Republican Senate hopeful Tom Kean Jr.'s campaign website says, "New Jersey gets the worst return on its federal taxes of any state in the country." The site claims that only 57 cents of every dollar New Jerseyans send to Washington comes back to the state in federal spending, the lowest figure in the country. The Tax Foundation, a "nonpartisan educational organization," recently put the figure at 55 cents of every dollar. Whatever the precise percentage, it seems that New Jerseyans, with their relatively high incomes, pay a lot in federal taxes and do not see as many direct benefits from those taxes as others do. And even as New Jerseyans may earn more than others in nominal terms, they do not have proportionately more disposable income than others due to progressive taxation and the elevated cost of living in this region (which includes the higher state and local tax burdens that are part a consequence of less money coming back from Washington). Congressional candidates would like you to believe that this depressing situation could be remedied through more effective representation at the federal level, though it seems to be a feature of the system rather than a reflection on New Jersey's current Congressional delegation.

Extending this type of analysis to the state level, it is worth noting that Bergen County boasts some of the highest incomes in New Jersey, meaning the same situation may be playing out for Teaneck and neighboring towns on the state level. Within Bergen County, the most recent figures widely available show that Teaneck's median household income lies above the median for the county as a whole, potentially exacerbating the problem. Like a denuded forest, Teaneck's considerable stock of earnings is being aggressively exploited by federal and state governments that do not replenish the resources in the form of subsidies and spending. This considerable wealth transfer from Teaneck to elsewhere leaves little for Teaneck's local needs. This is how Teaneck and its public institutions can seem both asset rich and cash poor simultaneously.

Teaneck's main asset, in a strictly financial sense, is a well-educated populace with significant earning power living on valuable real estate. Still, on account of the system we live in, this asset is not convertible into the premium amenities and services we may think we deserve. We cannot have it all. We have to choose between abundant open spaces, well compensated union employees, first rate services sans significant user fees, state of the art facilities, and special protections to preserve the status quo of economic diversity. Some of the items on the wish list are going to have to fall by the wayside, if they have not already. It may be hard to stomach, but the money is not ours to spend.