Working for Smart Growth:
More Livable Places and Open Spaces


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New Way to Pay for Schools

November 14th, 2003 by

  • Approximately 55 cents of every dollar paid in property taxes goes to fund local public schools.
  • About 25 cents funds the work of municipal government. The remaining 20 cents per dollar goes to the county for parks, roads and social services.
  • Both the Governor and the Legislature have proposed the cost of schools be offset by special impact fees assessed on new development.
  • There has been much public comment on impact fees by state leaders since the election. Impact fees are expected to receive priority attention in the final weeks of this Legislative session, which runs until the new Legislature is sworn in in mid-January.

(Source: 2002 Legislative District Data Book, Rutgers University Center for Government Services)


Covering the high cost of public schools with property taxes has two significant consequences:

It limits our choice of housing, because it pushes municipalities to favor development that attracts few or no school children, such as senior housing and commercial development, or large-lot homes.

It serves as a brake on residential development, and so reduces the amount of housing that’s available, even as it slows the rapid consumption of land.

Impact fees could help offset the cost of school financing. But unless impact fees are tied to better municipal planning, they will bring little more to New Jersey than accelerated and well-financed sprawl. And what municipality would want neighboring communities to have access to impact fees without the better planning that takes regional issues into account?

Impact fees could also be used to achieve one of the Governor’s oft-stated aims of bringing local plans into compliance with the State Plan, provided that impact fees are extended only to communities that agree to achieve Plan conformance. Impact fees should be waived for construction of affordable housing, which is in desperately short supply across New Jersey.

Without links to better planning, impact fees will simply subsidize sprawl. If impact fees are allowed only in communities with solid land use planning, they could be an incentive for smarter growth.

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