Take my house, please: Property taxes crushing residents in towns like West Orange
By Paul Mulshine/The Star Ledger
April 20, 2010, 5:55AM
Rosary Morelli has been living in West Orange since 1963. To hear her tell it, she’ll be lucky to get out alive.
“I can’t pay the taxes on my house,†said Morelli at a Sunday afternoon anti-tax rally on the steps of town hall. “I can’t even sell my house. In fact, with the offers the realtors are giving me, I could just put a sign outside saying, ‘Take my house.’ Take it for free. Just pay for the Dumpster.â€
Morelli might have been exaggerating a bit for dramatic effect. But maybe not. A check of one of those foreclosure websites on the internet shows more than 500 houses in West Orange up for sale. A big reason is the property taxes.
Also at the rally was Adam Kraemer, who is running for the board of education on today’s ballot. Kraemer, who has three kids in the public schools, was among the speakers calling for a “no†vote on a school budget that would raise property taxes another 7.3 percent. Combined with an expected increase in the municipal tax rate, that could put Kraemer’s house and many other houses in town over the West Orange Line.
“The West Orange Line†is a term I made up to describe a New Jersey invention I observed in an earlier visit to the town where Thomas Edison lived.
Our state seems to be the first in America to have pushed property taxes so high that in a town like West Orange, the tax bill may exceed the mortgage payment on a typical house.
That would seem to be the case in Kraemer’s neighborhood. The tax bill on his four-bedroom house on a quarter-acre lot is $25,972, he said. That will go up to about $27,600 if the budget is adopted as written, he estimated.
Kraemer doesn’t want to sell his house. He likes West Orange. But if he did want to sell, he said, he could get perhaps $500,000 judging from recent sales in his neighborhood. Do the math and you’ll see that the property tax payment on such a home could indeed exceed the monthly mortgage payment.
But who would pay West Orange taxes when they could move somewhere cheaper? Not Dick Codey. More than one speaker at Sunday’s rally noted that the former state Senate president had sold his overtaxed house in town. He now lives in Roseland.
That should give you a good idea just what a mess we’re in here in Jersey. Codey served as governor for a year, yet could do nothing about the tax crisis in what was then his home town.
But what about the current governor, the Republican who ran on a promise of cutting taxes? Chris Christie is moving West Orange farther over the line than any governor in history. Even if the voters take the governor’s advice and vote down the school budget, that vote would have at best a minor impact on property taxes.
The major factor driving up property taxes in that town and other suburbs in the state is the bizarre school-funding formula Christie adopted. All school aid comes from the Property Tax Relief Fund, which consists of the entire income tax and half a cent of the sales tax. And in this regard, West Orange’s problem is simple: The town pays a whole lot into the fund. But it gets back just a pittance.
West Orange residents pay more than $60 million a year in state income taxes. Under Corzine, the pittance they received in property tax relief was $9.5 million, about 15 cents on the dollar. Christie cut aid to $3.5 million, or a little over a nickel for every dollar the town sends to Trenton.
As a result, property taxes will skyrocket next year no matter what the voters do today. Their only hope is that the pols of both parties in Trenton will finally get the message and do something for people who are being taxed out of their homes. Maybe they will finally put on the ballot a property tax reduction plan similar to that adopted by California or perhaps Michigan.
Or maybe the state could just start paying for the Dumpsters. That would be a start.
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