Tax Policies
New Jersey’s fragmented system of local governance and its disproportionate reliance on property taxes for funding local services (particularly schools) combine to create incentives that have powerful, distorting effects on land-use decision-making.
Because municipalities are so often on their own to pay for local schools (regional, multi-municipality K-12 school districts are the exception, not the rule), every municipality has an incentive to adopt zoning that discourages any residential development that might attract new schoolchildren and hence require a hike in property tax rates. Instead, municipalities compete for the limited number of “clean ratables,” such as office parks and shopping malls, that their region can sustain. This results in the sub-optimal location of major projects and a self-reinforcing downward spiral of disinvestment for those municipalities that are unable to score these major projects, as rising tax rates continue to chase away the more prosperous residents and businesses.
A new bill streamlines New Jersey’s portfolio of economic incentives, but unless it is amended it will go too far toward subsidizing sprawl development.
As New Jersey’s economic-development incentives get restructured, it’s important that they preserve a location component, so that they are directed to the places most appropriate to receive them.
A new Rutgers report highlights the coming problem of aging and abandoned suburban office parks. Those facilities that cannot be repurposed to meet the market demand for mixed-use, transit-accessible employment centers should not be the recipients of state job-creation incentives.
Johnson & Johnson is establishing four life-sciences innovation centers but none in New Jersey, even though the state has many of the key assets that can make innovation districts successful. New Jersey needs ways to put an innovation district strategy to work here.
Incentives for solar facility development on brownfields and landfills should be made more attractive than incentives to develop on farmland and other open lands.
New Jersey has 243 transit facilities, ranging from small single-track stations to major multi-line hubs. The unique characteristics of each station, of its immediate neighborhood, and of its surrounding municipality mean that a wide variety of development strategies should be brought to bear in order to maximize each location’s potential. This report shows how data assembled by New Jersey Future can be used to make decisions on how to target various kinds of transit-oriented development efforts. September 2012.
Some frequently-asked questions about how smart growth would affect New Jersey’s future development, including how it affects traffic, taxes, and land preservation.
Research that examines whether the popular belief is true that municipalities with the highest concentrations of commercial properties also tend to have the lowest residential property tax rates. July 2010.
An examination of the problems caused by recent development patterns in New Jersey, and recommended steps to address them through smart-growth principles. April 2001.
Oct. 12, 2009 — A recent Monmouth University/Gannett New Jersey Poll offers some surprising insights into what New Jersey residents are willing to do to address the problem of high property taxes—including taking some significant steps that would improve the way land-use decisions are made, and allow for more regional governance and cost-sharing.
See all Future Facts and Articles in this category »
Reports, Presentations and Testimony
- 03/08/2013-A3680-S2583-Economic-Opportunity-Act-Joint-Statement
- 11/30/2011: Coalition Statement on Grow NJ Bill
- Financial Benefits of Density in Two New Jersey Downtowns 7-11 (Intern report)
- 10/14/2011: Comments: OCE Clean Energy Incentives Proposal
- Targeting Transit -- New Jersey Future
- Chasing Their Tails: Municipal Ratables Chase Doesn't Necessarily Pay 07-10
- Presentation: Reining In Local Budgets 05-10
- Property Tax Reform and Land Use 07-06
- Impact Fees 01-04
- Tax Reform 09-03
- Realistic Opportunity? The Distribution of Affordable Housing and Jobs in New Jersey
