brewster wrote:
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stateaidguy wrote:
EV is the market value of property in a town. It is calculated annually by the county tax assessor. If real estate sales exceed assessed values by 20% on average, the assessor multiples the assessed value by 1.2 to get Equalized Valuation.

EV doesn't include abated property. It only includes taxable real estate. (which might include land values for abated properties since land taxes are usually not abated.)

Aggregate Income is total income. I am not exactly 100% sure how this is computed. The people at the DOE I asked didn't know because the data is calculated by the Treasury, not the DOE.

However, The income of residents of PILOTed buildings definitely does count towards Aggregate Income, so if you want to make another anti-PILOT argument you could say that PILOTed properties slightly increase JC's Local Fair Share even though they pay no school taxes.

(JC's aid is determined by Adjustment Aid anyway, so, unless Adjustment Aid is reformed, JC's LFS is irrelevant to its aid total.)

The actual formula for LFS for 2016-17 is


(Equalized Valuation x 0.013156218 + Aggregate Income x 0.046185507)/2


The formula for LFS changes slightly year to year, so you can't compare a district's LFS from one year to another, but within a FY year, you can compare a district's LFS to another district's.

JC's LFS = $330 million.
Edison is #2, but its LFS is only $195 million.

So JC's tax base is 60% larger than the #2 town in NJ.

OK, that's certainly interesting that they use the personal income of the entire city population. But comparing tax bases without population seems irrelevant. JC's tax base is 60% more than Edison, but it's population is 250% larger, making it a much poorer city, if I understand the methodology correctly.

brewster wrote:
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stateaidguy wrote:
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brewster wrote:
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stateaidguy wrote:
If Jersey City loses state aid it is to HELP poorer districts.

What metric do we use to determine which city is "poorer" in this context?

Median individual income?
Median Family income?
Property tax paid per capita?

A lot has been made of JC's development, but 3/4 of the city is still relatively poor by NJ standards.

SFRA does a pretty good job of evaluating a district's needs and tax capacity.

Needs is the Adequacy Budget. It is the enrollment with extra weights for poor kids, ESL kids, and then an extra multiplier for concentrated poverty.

Tax Capacity is the Local Fair Share. It is a hybrid that depends on Equalized Valuation and Aggregate Income.

If a district's Adequacy Budget is greater than its Local Fair Share it is supposed to get Equalization Aid.

If LFS is greater than Adequacy Budget it doesn't get Equalization Aid.

If Adequacy Budget is $60 million and Local Fair Share is $45 million, a district is supposed to pay $45 million in taxes and get $15 million in Equalization Aid. (In reality, chances are the district will not get $15 million in Equalization Aid.)

There are aids for sped, transportation, and security, but these are smaller streams and to keep things simple I won't address them here.

Ok, so JC has $21,661,162,459 in EV. It has $7,454,497,639 in Aggregate Income.

Put them together in the formula for LFS and you get $330 million.

And what is JC's actual tax levy?

$112 million

Now let's compare Jersey City to ... say BELLEVILLE. (just a random local working class example.)

Belleville's EV = $2,790,454,316. Agg Income = $916,370,877.

And Belleville's tax levy?

$38 million.

So are you kidding me when you tell me that you can't pay more in taxes when a town with a ninth of your valuation pays a third of your tax levy?

I think I followed that, it is a little arcane and hard to reproduce playing at home. Could you define Equalized Valuation and Aggregate Income? Am I correct in believing the 'equalized value' does not include abated property at all? Or is it squeezed in there somehow?

Actually, we should shove this digression over to the appropriate thread, since the one thing we all agree on is it has nothing to do with the reval.

Yvonne wrote:
No, it will mean non abated Jersey City taxpayers will pay $4,000 to 6,000 more in board of ed funding to the school district if $224 million is required from local taxpayers.

brewster wrote:
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stateaidguy wrote:
If Jersey City loses state aid it is to HELP poorer districts.

What metric do we use to determine which city is "poorer" in this context?

Median individual income?
Median Family income?
Property tax paid per capita?

A lot has been made of JC's development, but 3/4 of the city is still relatively poor by NJ standards.

Yvonne wrote:
I just copied and paste from the article below. These are frightening words:

?There are plenty where the state is providing more aid than it should, and there?s been enrollment loss, and it doesn?t make sense,? Beck said.

She said the state also needs to account for towns that do not contribute enough in local property-tax revenues to the schools, but still receive adjustment aid. The poster child for that phenomenon is Jersey City, which is ?slightly? under adequacy, according to commissioner of education David Hespe. The district receives $114.5 million in adjustment aid, in addition to other education aid, but contributes $224 million less in local taxes than it should according to the state?s ?fair share? calculation, Beck said.

?Jersey City has had enrollment growth, but I think some of us would argue that they?re locally not doing what they?re supposed to do to help fund the cost of that enrollment growth -- which is counter to a lot of our other school districts, like Freehold Borough,? she said.

Jersey City is not contributing enough in part because of its frequent use of municipal tax abatements, which spur development but have the effect of shifting more of the burden for school funding to the state, Beck said.

The idea of changing adjustment aid seemed to be generally welcomed by other members of the budget committee, including the chair, Sen. Paul Sarlo (D-Bergen). Hespe noted that the Department of Education had proposed a similar change a few years ago, and said it would be important to clearly explain to districts facing cuts why their past adjustment aid has been unfairly high.

Monroe wrote:
The reval will certainly have an impact on this

http://www.njspotlight.com/stories/16 ... ut-of-touch-with-reality/

JCGuys wrote:
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thor800 wrote:
So homeowners will be paying property taxes based on market values now as opposed to assessed values ?

Isnt the concept of market value more subjective tho ? Prices especially downtown are the highest theyve ever been but thats somewhat indicative of several factors like even crazier prices in brooklyn.

Whats to say that next year the dtjc market wont see a correction ? It seems like some sort of 3 year average would make more sense.

Really? This is why we should not wait to have a reval every 27 years. Most other counties in the untied states do it annually at minimal cost. Why does NJ muck it up??

A property owner in Greenville is paying 7% of the market value of his house which goes to subsidize a property owner in DTJC paying 1%. It's an outrage. Reverse robinhood. A total shame it's been allowed to happen this long.

SOS wrote:
Why should anyone help Freehold Boro when their own fiscal mismanagement is to blame? Talk to anyone that lives there and follows how the city is managed.

Monroe wrote:
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stateaidguy wrote:

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Yvonne wrote:
In case you missed - JC will get $20 million less in state aid. Since 2005, local taxpayers have paid $40 million more to the budget. The state froze our payment at $72 million since 1990 but it has been going up and will continue to go up.

Yvonne,

Where did you get the $20 million amount?

The state aid notices show JC getting another $300k.

I corrected her on this a week or so ago. JC schools are getting a bit more this year than last.

Yvonne wrote:
In case you missed - JC will get $20 million less in state aid. Since 2005, local taxpayers have paid $40 million more to the budget. The state froze our payment at $72 million since 1990 but it has been going up and will continue to go up.

hudson57 wrote:
yes, in theory it's a zero sum result. however, what we, the uneducated property taxpayers, don't know is if and what such reval will trigger on county or state level!? if aid/grants decrease as a result of reval, then the total tax burden in absolute $$ terms will go up...

brewster wrote:
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stateaidguy wrote:
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JCGuys wrote:
This is Fulop's Waterloo.

He should be welcoming the reval with open arms. Why did he wait for the state to order one? By fighting it, this tells me he prefers downtown and the Ogdenites (his neighbors) over the families just trying to make it in Bergen-Lafayette or Greenville.

The poor are literally subsidizing the rich.

I was thinking about this more and I agree 100% that opposing the reval makes zero political sense for Fulop.

I won't speculate about Fulop's chances to be reelected mayor, but this is going to cost him in the 2017 gubernatorial primary because primary voters tend to be higher-information and more ideological than general election voters. High-information voters can't be fooled into thinking that a reval=tax increases and Democratic primary voters aren't people who are motivated to vote against tax increases in the first place.

To high-information Democrats, opposing a reval looks like Fulop is protecting the rich and will fit into a pattern of indifference to fair taxation that also shows up in overPILOTing and aid hoarding. This indifference to fair taxation might undo whatever goodwill Fulop gains for increasing the JC minimum municipal wage to $15 an hour.

I think that elected officials whose endorsement Fulop seeks will be turned off by Fulop's opposition to the reval. 100% of mayors (outside of Hudson, Middlesex, and Union counties) will understand that a reval isn't a tax increase and many of them will not understand why Fulop refuses to do what nearly every other town in NJ does on a frequent basis.

Very well put. As I said, it's baffling why Fulop threw himself on this obvious grenade, did he really think everyone would believe his bullshit? There must have been a serious quid pro quo he needed to pay off.

JCGuys wrote:
This is Fulop's Waterloo.

He should be welcoming the reval with open arms. Why did he wait for the state to order one? By fighting it, this tells me he prefers downtown and the Ogdenites (his neighbors) over the families just trying to make it in Bergen-Lafayette or Greenville.

The poor are literally subsidizing the rich.

JSleeze wrote:
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stateaidguy wrote:
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tommyc_37 wrote:
Agreeing with bodhipooh. My question though is why is JC's tax rate similar to that of the suburbs? That seems off. NYC's is much less than 1%, while the suburbs are around 2%.

Should taxes in a dense urban city with shitty schools be the same rate as a suburb with great schools, etc?

This generalization is unfounded because suburban tax rates vary tremendously.

Taxes depend on what percent of the tax base is residential, how many students are in the public schools, how much aid the municipality and school district get from the state, how rich the place is generally, and what kind of tax toleration the town has.

Millburn's Equalized Tax Rate is 1.8 because the town is rich, has a big mall, and actually only spends $15,600 per pupil. (Millburn gets virtually no state aid. Its spending is roughly at Adequacy)

West Orange's ETR is 3.8 because the town gets virtually no state aid despite having high need ($700 per student), isn't that rich (in fact its real estate market is in clear decline) wants to spend $17,700 per student on its schools anyway, doesn't have that much non-residential property.

West Orange's taxes would be even worse if it didn't have a large private school population.

Glen Ridge's taxes are 3.1 because it has virtually no non-residential property, a quarter of its population is in the public schools, and it gets virtually no state aid. Even though GR is affluent, its taxpayers can't keep up and school spending is only $14,600 per student. (this is below Adequacy)

Bloomfield's taxes are 3.6 because doesn't have a lot of non-residential property, and is ripped off on state aid ($3100 a student for a relatively poor population). Bloomfield isn't high spending though; its schools spend only $13,100 per student.

Bloomfield's spending is way below Adequacy.

I could go on and on....

Your knowledge and explanation of the system is quite impressive, but you miss the point: the system is broken. Sure, suburbs are being overburdened by underfunded urban districts - but before we go about rearranging the furniture, why don't we address the gaping hole in the roof (through which all of our $$ is being sucked out): the need for consolidation.

There are waaaaaayyyyy too many school districts in NJ (603 vs. 28 for Maryland.) There are waaaaaayyyyy too many municipalities with far too many overpriced police chiefs and underutilized cops, school administrators, public works employees, et al. There is no need for 2/3 of the towns in NJ and probably 3/4 of the school districts to exist. Many (most?) services currently being provided by towns of 5,000 or fewer people (some of which showed up on the NJ.com list of towns with police chiefs making more than $200k) could be provided by their counties or in conjunction with a neighbor via consolidation or shared services. NJ is the most densely populated state in the country - ideal for reaping economies of scale and efficiencies given the relatively close proximity people have with each other - and yet we choose to go in the exact opposite direction. Baffling, really.

tommyc_37 wrote:
Agreeing with bodhipooh. My question though is why is JC's tax rate similar to that of the suburbs? That seems off. NYC's is much less than 1%, while the suburbs are around 2%.

Should taxes in a dense urban city with shitty schools be the same rate as a suburb with great schools, etc?

Pebble wrote:
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stateaidguy wrote:
I don't see Christie having an anti-Fulop, anti-Jersey City agenda.

Really?! You can?t see how Christie has an anti-Fulop agenda??

Sweeney is Christie?s guy. Christie is trying to help him out. Both of them are huge piles of garbage posing as humans.

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stateaidguy wrote:
I'm sure that people here can think of ways that Christie has hurt (or not helped) Jersey City, but Christie has given corporations relocating to Jersey City large tax breaks and has given large tax breaks to Jersey City developments.

Journal Squared, for instance, is getting $93 million in tax breaks.

http://www.nj.com/hudson/index.ssf/20 ... _journal_square_resi.html

I know I can be a broken record on state aid, but Christie has preserved and slightly increased Jersey City's education aid, even while Jersey City is overaided and numerous districts across NJ are severely underaided.

Christie has had Matthew Boxer's 2010 report on the unfairness of tax abatements on his desk for years and has done nothing to reform NJ's PILOT policies. Since JC exploits the PILOT law like no other city, this can be read as another favor to JC.

Christie has ignored some of his own Republican allies, like Sen. Mike Doherty and Assemblyman Jack Ciattarelli, to preserve JC's state aid and maintain the status quo PILOT law.

There are going to be people who believe Fulop's protests about "bullying" and see ordering the reval as Christie just trying to hurt Fulop, but the "hurt Fulop" theory looks bogus to me.

I know how weird it is for an egotistical monster like Christie to do something that looks like Good Governance, but we are all going to have to suspend our disbelief on this one.

Christie gives all companies relocating tax breaks. That isn?t JC specific.

While Christie is correct that a reval needs to happen, the timing is specific and the city was singled out specifically.

WhoElseCouldIBe wrote:
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Pebble wrote:
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WhoElseCouldIBe wrote:
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stateaidguy wrote:
I can't believe that Fulop would waste Jersey City (and state) resources fighting this.

I don't know how the appeals process works, but any objective person (who understands math) will see how inequitable JC's taxes are and will side with the state.

The appeal will be futile and at best just delay the inevitable. The appeal will just prolong uncertainty about how high taxes will rise downtown and then, by causing delay, just let real estate prices diverge even more from official assessments.

Like a few other people here, I don't understand why there isn't any fury about the lack of equitable taxation from people who live in sections of JC where values haven't increased that much since 1988. There are people who are overpaying by thousands of dollars a year.

Good point, Fulop is using city funds on legal fees to stop a reval. These funds could have gone into the city to improve it. All so he could kick the can down the road for the next mayor.

Exactly!

Gov Christie is absolutely pulling politics with this maneuver. He wants Fulop to take a hit so that his buddy Sweeney can be the next in line. That doesn't negate the fact that Fulop is playing politics with the wallets of those in BeLa, Greenville, Journal Square and the Heights.

It's one giant pissing contest which means there's at least two dicks involved...

Fulop should take the hit, he's the one who's using city funds to delay a much needed reval for political reasons. Sure, Christie doesn't like Fulop but this still needs to be done.

Yvonne wrote:
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Monroe wrote:
And yet JC taxpayers are still not paying their 'fair share', whether they're living in abated or non-abated properties. The taxpayers getting screwed are the ones supporting JC schools who don't live here, and see the abysmal graduation rate for their wasted money. And how much has the state contribution increased since 2005? I'll bet a lot more than 40 million.

The only people who are hurt are the small homeowners who lose their homes in tax liens. After developers buy their liens, they foreclose on the property and approach City Hall about developing affordable housing with tax abatements. There are $2.8 billion in ratables, nearly one third of the city that is not contributing to the school system. Fix that problem first before you ask someone to contribute more money to the public schools.

stateaidguy, you mentioned that abatements are usually only given on the improvement and not the underlying land. What are the instances where the land can also be abated? Do you know of any recent developments within Jersey City that has also had their land abated?