Republican members of the Assembly Appropriations Committee rejected Gov. Phil Murphy’s claim that increased school funding in his $53.1 billion budget equates to property tax relief, and endorsed a GOP plan (A5253) to tap into income tax revenue to fully fund schools and ease the burden on property taxpayers.
“While Governor Murphy has increased school aid, property taxes continue to go up, too,” observed Brian Bergen (R-Morris). “The pain of property taxes is only getting worse. Taxpayers are not getting relief, they’re hurting. The good news is that it is possible to lower property taxes while increasing school funding and I hope to see bipartisan support for our plan.”
The proposal would require the state to fund school districts up to their formula-determined adequacy budget, and tie the additional aid to dollar-for-dollar property tax cuts. Currently, the state doesn’t have an obligation to fund schools up to adequacy, instead relying on property taxes to fill in the funding gap. School property taxes have increased by over $1.1 billion under Murphy. The plan would cut property taxes by at least $1.2 billion.
“Our schools need equity, and that starts by recognizing what is affordable for each school district,” said Antwan McClellan (R-Cape May). “Relying on property taxes is relying on a tax that hurts middle-class and low-income people. The state needs to rely more on income tax revenue to fund schools so the people who need property tax relief can get it.”
Roughly $4 billion of income tax revenue, which primarily funds schools out of the property tax relief fund, was used for pork spending and to pad the state surplus last year, which is evidence that the state has the money to pay for the plan. That was made abundantly clear on Tuesday, when Murphy unveiled a budget with a surplus that increased by nearly $4 billion and income tax revenue nearly a half-billion dollars higher.
The state hoarding $10 billion in surplus while residents live paycheck to paycheck, school districts face big cuts and students suffer from unprecedented learning loss seems unconscionable,” Kevin J. Rooney (R-Bergen) said. “We have the opportunity to fully and fairly fund schools, and provide long-term, reliable property tax relief.”
Currently, the state only has to cover the difference between a school’s adequacy budget and the local cost share, which is known as equalization aid. Murphy hasn’t shown a willingness to meet the state’s obligations early, and continues to cut state aid to about 200 school districts to pay for funding increases at other schools. The Republican plan would make the adequacy budget the state’s school funding obligation.
“It’s plain and simple. This plan would get every school district up to its minimum level of funding to provide a thorough and efficient education while lowering property taxes,” exclaimed Brian Bergen. “If you oppose this plan or won’t push for it to be passed for any reason, you have lost sight of the top issues in the state: property taxes and school funding.”
Former-Abbott districts – representing schools in poorer communities – that are under adequacy would receive more state aid, and their residents would receive much needed property tax relief, too. There is an indisputable correlation between test scores and socioeconomic status.
The current school funding formula was written to address that problem in response to the Abbott v. Burke cases, but the education gap has not been closed. The current formula also requires far higher property taxes in those low-income districts, while state aid is nearing its peak because it does not target a district’s adequacy budget.
“Every single school district benefits,” said Rooney. “That means every single taxpayer benefits. New Jersey has a long history of school funding problems, and it is still an issue today. This plan is the first one that fulfills our constitutional duty.”
The income tax was implemented in response to Robinson v. Cahill, a school funding case predating Abbott v. Burke that said New Jersey wasn’t providing fair funding for poorer districts. The tax was then dedicated to the Property Tax Relief Fund in the state Constitution.
“To this day, the state has never provided fair funding for school districts or lowered property taxes,” said McClellan. “And the way the state is conducting business now, we never will. However, we can with this alternative.”
Last week, Assembly Education Committee members Assemblymen Erik Simonsen and Brandon Umba, and Assemblywoman Michele Matsikoudis, signaled support for the GOP’s proposal, dubbed the “Fully Funding Schools and Cutting Property Taxes Act.” The bill has been referred to that committee, but not yet posted for consideration.
The New Jersey Business & Industry Association, The National Federation of Independent Businesses, the African American Chamber of Commerce of New Jersey, and the Chamber of Commerce Southern New Jersey have also endorsed the Republican plan, lauding its achievable, commonsense approach to lowering taxes, which will strengthen the state’s workforce.