The Star Ledger's report of July 25, 2004 underscores a point the ICS and other social justice organizations have been making on for quite some time -- that the heavy reliance on property taxes in New Jersey contributes to an overall system of taxation that disproportionately burdens lower- and middle-income families and the state's minority residents.
     The study, conducted by Star-Ledger reporter Robert Gebeloff, examined tax assessment and sale prices in 66 towns in Essex, Middlesex and Union counties. It then compared the tax assessment to actual market prices and overlayed that information with demographic data obtained from the U.S. Bureau of the Census. The overall finding was that, in many cases, neighborhoods that are disproportionately black have a higher ratio of taxes to value, i.e. they were paying a higher rate of property taxes. To use Gebeloff's example, a $200,000 home in a black neighborhood might be getting the same tax bill as a $300,000 in a white neighborhood. Likewise, Gebeloff found that "in a dozen towns where the disparity is greatest, blacks are more than three times as likely to live in overtaxed neighborhoods."
     How can these disparities be remedied? There are two main approaches. One would take place at the municipal level and would require New Jersey's cities and towns to perform more frequent revaluations. In the counties examined by the Star-Ledger the property revaluations typically had not been done in 15 years. More frequent revaluations would ensure that taxes more accurately reflect the market value of properties. This policy is already practiced in some places. Massachusetts, for example, requires its municipalities to update tax rolls every three years, and most towns in New Jersey's Somerset and Hunterdon counties do annual updates.
     The second approach is a statewide reform of the tax system that would eliminate or sharply reduce regressive taxes such as property taxes, and replace them with progressive forms of taxation -- taxes that take more from those better able to pay. This is a much more long-term and comprehensive approach than simply conducting more frequent local property revaluations but it is necessary if states such as New Jersey are going to overcome inequity in taxation, inequity in spending for essential services such as education, and provide themselves with the revenue to overcome the fiscal crisis they face.
      
Read our full report on taxation, fiscal crisis, and race here: Fiscal Crisis and Racial Disparities Highlight the Need for Tax Reform.