Optical illusions distract from real issue
Gov. Corzine's cagey comments to a local radio station on property taxes hold out little promise of meaningful systemic changes that might help the taxpayers of Teaneck. "Hopefully we'll get it down to 3 percent or less," Corzine told New Jersey 101.5 FM, according to yesterday's Record. Why the very cautious optimism that future increases in property taxes statewide can be limited to 3 percent per year when they have been rising at 7 percent annually over the recent past? Corzine is hopeful that property tax increases will slow because, if he gets his way, local sales taxes would partially replace them as sources of municipal revenue. No, this is not a joke.
Not only is this accounting trick silly, it is actually infeasible for many towns, Teaneck included. As discussed here previously, Teaneck could never make effective use of the power to levy a sales tax even if it were permitted to.
But Corzine, and anyone else who thinks that the problems facing New Jersey's municipalities can be solved by authorizing more varieties of taxation, is missing the point. Shifting the tax burden around can only go so far if the overall tax burden keeps rising at a rapid rate.
Teaneck is finding this out even as it tries desperately to attract new development and increase ratables. Where is the desperation in seeking cost savings? The fact that we leave the cost-cutting to a group of amateurs on a newly constituted Financial Advisory Board while awarding large contracts to professional corporations to promote development says a lot about Teaneck's priorities. One wonders if those priorities are misplaced.
Behold, lower property taxes!
Er, just ignore those new sales taxes...
Teaneck is finding this out even as it tries desperately to attract new development and increase ratables. Where is the desperation in seeking cost savings? The fact that we leave the cost-cutting to a group of amateurs on a newly constituted Financial Advisory Board while awarding large contracts to professional corporations to promote development says a lot about Teaneck's priorities. One wonders if those priorities are misplaced.
Behold, lower property taxes!Er, just ignore those new sales taxes...
posted by Teaneck Blog @ 10:35 AM
21 Comments:
Lets tax movie houses in town.
We can have an event kicking off the new tax as part of the Teaneck International Film Festival Oct 30.
For more info on the Film Festival see the schedule ,its posted on Teaneck Progress blog
GO Teaneck
Another Governor, another gimmick.
With Whitman, it was reductions in pension fund payments. With McGreevey, it was borrowing billions to fill a budget gap, a tactic the New Jersey Supreme Court found blatantly unconstitutional. Now Jon Corzine has found the solution to rising property taxes... increasing the regressive sales tax beyond the July increase from 6% to 7% and this month's expansion of the impost to dozens of categories never taxed before.
At best, Corzine's accounting sleight-of-hand "saves" us home owners a few dollars from our property tax pockets while dipping in to our sales tax pocket for a corresponding tax increase.
Corzine's proposal will benefit those municipalities with high retail sales (i.e. those with regional shopping malls), while harming those with deteriorating and struggling main streets, a la Teaneck. Few municipalities would be harmed more by this schtick than would Teaneck.
Under our current system, sales tax flows back to the state, who then allocates the revenue for the benefit of all state residents, regardless of where the money is collected. Paramus, which has half of its rateables in commercial property, sees a huge benefit from the property taxes remitted by the owners of these properties, but gets no direct benefit from the retail spending that takes place in the Borough. A Teaneck shopper who buys an item at Garden State Plaza is not directly passing any money to Paramus, and can sustain the vague hope that some of the Sales Tax collected will end up back in Teaneck.
Under the Governor's proposal, those shopping meccas with the least to lose by raising rates would be able to put their hand right in the register (and the shopper's pockets) by adding to the sales tax rate. Paramus generates $5 billion a year in retail sales. Assuming about 60% of that is taxable, a 1% increase in the sales tax rate dedicated for local use would bring in a whopping $30 million a year. An add-on of as little as half or even a quarter of one percent would still bring in many millions to a Paramus.
Teaneck, with shopping districts on Cedar Lane and elsewhere that are already struggling, can ill afford to impose yet another disincentive to shopping here in town, even if it might bring in some token added revenues to the Township's coffers.
Teaneck can only see a net loss from the implementation of this proposal. New Jersey taxpayers gain nothing from this nickel-and-diming shell game of finding new ways for government to pick our pockets.
The answer must be finiding ways to meaningfully cut costs at every level of government. At the local level, the Financial Advisory Board -- amateurs or otherwise -- will have a difficult task of identifying cuts (or new revenue sources) in time for a January budget.
Public school spending, which accounts for some two-thirds of our overall property tax burden, is due for some thorough scrutiny, given spending that significantly exceeds that of its peer K-12 districts in Bergen County. As I have already suggested, a Board of Education equivalent of the Township's FAB could go a long way to convince taxpayers that our public school students are getting an education that is both thorough AND efficient, as mandated by our state consitution.
At all levels -- state, county, municipal and schools -- the issue is spending, NOT funding.
Alan Sohn
As I have already suggested, a Board of Education equivalent of the Township's FAB could go a long way to convince taxpayers that our public school students are getting an education that is both thorough AND efficient, as mandated by our state consitution
If that is the case why can other Towns do it for less?
It would seem that Teaneck is doing something wrong...they are not offering the same level of education as other towns do and they have the balls to charge MORE!
How about turning Teaneck Rd & Queen Ann Rd. into toll roads? This would raise a lot of revenue and besides, I hardly use these roads, why should I have to pay for their upkeep with my taxes?
psp -
Why should only those driving east of the RR have to pay? I say tax Windsor, Sussex, Larch, and River too. Fair is fair.
Not only will we raise revenue but we will encourage less reliance on fossil fuels (and more walking)
It would seem that Teaneck is doing something wrong...they are not offering the same level of education as other towns ...
If you are going to make such a claim you should be more specific as to what it is based on and what other towns you are referring to.
There has been much already written on the blogs that might refute this statement, but being vague and general it could mean anything.
Alan Sohn said...
At all levels -- state, county, municipal and schools -- the issue is spending, NOT funding.
When the state and federal governments cut taxes and reduce funding to local government for towns and their public schools, local taxes rise to meet the gap. The issue of funding, taxes, and spending cannot be separated.
While the increase in the regressive sales tax is unfortunate, a more progressive income tax solution is politically infeasible.
and also said ...
Public school spending, which accounts for some two-thirds of our overall property tax burden, is due for some thorough scrutiny, ...
It actually accounts for less than 60%. Public school spending is scrutinized every year at both the local and state level. While additional local scrutiny may be beneficial one should not imply that there is none.
Tom:
At least you are consistent. Pick on a nit which forms the least important part of a poster's argument and view it as a refutation.
Well you are right - school spending is just a hair under 60% of the overall tax burden (as if that makes it any less of an important spending area on which to focus). But wait, there's more. Actually, when you limit the discussion to spending over which Teaneck taxpayers have complete control (ie. by eliminating county spending), based on the 2005 numbers, spending rises to 63% of the total.
Now that we are done with the silliness, let's focus on the main point of Alan's point. The BoE should welcome an external review Board. If the Board is as fiscally prudent as they say, they will have external verification to use in the campaign for the next school Budget. Hey, an outside Board, might even identify some areas of waste or missed efficiencies that the BoE missed.
The response of the Board to last years budget rejection and the effort to extend the review Town Concil's Review Board to the BoE (wihtout proposing an alternative) makes it clear they do not want anyone else's input. As I asked in an earlier thread - what are they afraid of?
The BoE is afraid that the common taxpayer will find out about the waste that has occured over the years!
Cowards who hide behind anonymity to make baseless attacks should not accuse others of being afraid.
Wouldn't it be better to address the argument rather than the choice of identity? The points are no less valid without a name attached to them.
That said, anonymous posters are requested to create a unique identity for the sake of clarity and readability.
Thanks.
Sir Blogger:
Perhaps you would care to offer your opinion on the statements of the 8:40 anonymous poster. Do you agree that, "... the main point of Alan's point. The BoE should welcome an external review Board?"
If as the poster imagines, this is the main point, how would, saying, "While additional local scrutiny may be beneficial one should not imply that there is none." be refuting this point?
Alan Sohn is one of the more thoughtful posters on your sight. I can't imagine how my post can be read as an attempt to refute everything he said.
That being said, I made an error concerning Alan's statement, "Public school spending, which accounts for some two-thirds of our overall property tax burden"
I mistakenly read school spending as school taxes. In this case, the actual number would be just a hair under 58%. (I did not have the exact figures when I said 60%.) Calculating spending as a percentage of the overall property tax burden makes no sense. To illustrate, total budgeted property taxes for 2006 are $123 million (including the county). Total township budgeted expenditures are $53 million or 43%. The school budget is $85 million or 69%. Total of budget expenditures would therefore be 112%. If the $9.5 in county property taxes spending would account for 122%. All silly percentages.
I have no idea where anonymous's 63% comes from. From his statement about "eliminating county spending" I would assume he actually means taxes and not spending, but then it would be closer to 64%. In 2006 it would be 63%, but he specifies 2005. While he gets closer to two-thirds with this clever trick, it has nothing to do with the "overall property tax burden." It would be as silly as saying that if you include federal and states income taxes, payroll taxes, and sales taxes school spending is less than 10%.
You (TB) say, "Wouldn't it be better to address the argument rather than the choice of identity? The points are no less valid without a name attached to them."
The anonymous accusations that the board is afraid and trying to hide their misdeeds is neither an argument nor a point. Relabeling such baseless attacks, gives them validity that they don't deserve. I know there is a term for this type of debating trick, but it escapes me.
The anonymous accusations that the board is afraid and trying to hide their misdeeds is neither an argument nor a point. Relabeling such baseless attacks, gives them validity that they don't deserve.
The poster was suggesting that an important body that is accountable to the public ought to welcome additional scrutiny during a period of fiscal crisis in the Teaneck unless it feels it cannot withstand that scrutiny for some reason. You need not agree, but dismissiveness and name-calling are not a satisfactory response, and unfortunately most debates on the stewardship of the BOE degenerate into that.
Personally, I am sympathetic to the argument that the system itself contains the necessary checks and balances built into it and to introduce additional ad hoc bodies with uncertain mandates can muddle the picture and subvert the process. However, given the circumstances, this might be a wise course anyway.
In theory the ability to approve the School Budget and S-1701 (which caps increases in School Board spending) should provide those checks and balances.
However, the BoE's largely token response to the rejection of the budget and the then Town Council's willingness to agree, calls into question the effectiveness of that "check." Similarly, the effectiveness of S-1701 in forcing school district's to make tough budgetary choices remains to be seen.
However, in the case of Teaneck, spending is already in the top 10% in so many metrics that even if S-1701 is effective in limiting the rate of future increase, we will still be at the top of the curve.
Of course, school board elections are the ultimate check. Maybe a Board that is unwilling to solicit and at least listen to outside advice needs to be "checked."
8:40blogger:
A purely theoretical question: In return for having a BOE Financial Advisory Board (presumably appointed by the BOE with input from the administration), would you be willing to forego the annual "Yes-No" school budget referendums?
Of course, you would still have the ultimate check of school board trustee elections.
8:40blogger, a purely theoretical question:
In return for having a BOE Financial Advisory Board (presumably appointed by the BOE with input from the administration), would you be willing to forego the annual "Yes-No" school budget referendums?
Of course, you would still have the ultimate check of school board trustee elections.
8:40Blogger said...
However, the BoE's largely token response to the rejection of the budget and the then Town Council's willingness to agree, calls into question the effectiveness of that "check."
It seems you are rewriting recent history by saying the BofE decided on the amount of the budget cut and and the council went along. However, I may be misinterpreting what you meant by the "token response". Can you clarify?
There is an article in today's Star-Ledger which seems pertinent to the overall discussion, "Mid-level districts short on funding, school study finds"
The article say that New Jersey's property taxes account for 55% of school funding. In Teaneck property taxes account for 85%.
As I recall, the BoE rejected the Council's recommendations for the cuts to be made and made cuts that are very temporary in nature - no programs were cut and as a result,no basis for a permanent reduction in spending.
BTW, worth picking up Saturday's Bergen Record which carries a report about a panel commissioned by the State's Dept of Education to "to find out how much a 'thorough and efficient' education should cost in every school district in New Jersey. Those experts came up with a list of what kids need, and state officials calculated how much those services would cost." http://northjersey.com/static/graphics/pupilcosts_102006.html
The results - they believe that Teaneck is overspending by $9.4 million or spending over than 15% more than the experts say we should be spending. There are very few districts in Bergen and Passaic that have such a degree of overspend from the expert's view. The article does not identify these "experts" and I am sure that Tom will (1) find a small flaw in my numbers; and (2) explain to us that Teaneck is thrifty in ways that no expert could possibly perceive.
However, at some point (after this, the teachers' contract, the former Supt.'s retirement package), all but the staunchest suppoters of the BoE would allow that the Board's fiscal credibility is in need of a boost. To Jeff Ostroth's question, an external review should be welcomed by the BoE as a way to increase its public credibitility so that future budgets will pass - not a substitute for the budget vote (which in any event I believe is a state requirement).
8:40Blogger said...
As I recall, the BoE rejected the Council's recommendations for the cuts to be made and made cuts that are very temporary in nature - no programs were cut and as a result, no basis for a permanent reduction in spending.
This is more accurate than your first version. "... the BoE's largely token response to the rejection of the budget and the then Town Council's willingness to agree ..." which imply that the board decided on the cuts and the council than agreed. In actuality once the council has decided on the amount of the cut they have no further role in the process.
However, you've added something new claiming that the cuts were "temporary in nature". My recollection is somewhat different than yours. I believe part of the cuts involved the elimination of at least one and possible two administrative positions. That would not be "temporary in nature". I think another major saving was to not do upgrades to some of the elementary school playgrounds. These would probably fit in your category. I don't recall that in it's recommendations the council suggested program cuts. Does anyone recall which of their recommendations were ignored?
8:40Blogger also said...
I am sure that Tom will (1) find a small flaw in my numbers
Clearly your use of the word small goes along with your lack of understanding of numbers, but to make you feel better I did find an egregious flaw in your numbers. It's not 15% it's 17.6%.
and the 8:40Blogger added...
[Tom will](2) explain to us that Teaneck is thrifty in ways that no expert could possibly perceive. Can you perhaps explain what leads you to this conclusion and why you feel compelled to speak for me?
The How much should education cost? table referred to by 8:40blogger was a companion piece to Study shows N.J. schools underfunded by $190M
The How much should education cost? table referred to by 8:40blogger was a companion piece to Study shows N.J. schools underfunded by $190M
based on this how does the Teaneck BOE explain the massive over spending that is occuring?
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