Asm. Space: Urban Tax Abatements prevent Property Tax Relief for all New Jerseyans

WASHINGTON, D.C. – October 18, 2013 – (RealEstateRama) — Once again, Jersey City is looking for more tax breaks. As the Wall Street Journal recently reported: “Jersey City’s gleaming corporate towers and luxury residential skyscrapers were built in the past three decades with the aggressive use of tax breaks that helped transform its waterfront district.”

Those Tax breaks have made life easier for the corporations and millionaires who inhabit those “gleaming corporate towers and luxury residential skyscrapers,” but they have taken away tax revenues that could have gone to funding the education of the children of Jersey City. And because it is a so-called “Abbott District,” Jersey City acts as a vacuum cleaner, sucking up state education money that should help financially at-risk children across the state.

The Wall Street Journal noted that Jersey City’s abatement program has been criticized by those who argue that the tax breaks that benefit “Wall Street commercial tenants and young professionals from New York City. . . starve the state and school districts of revenue and give local officials unregulated say over fiscal decisions affecting the rest of the state.” The newspaper goes on to report: “State Comptroller Matthew Boxer cited Jersey City in a 2010 report that found significant revenue was being lost through tax abatements. The city exempted property valued at roughly $2 billion at the time, leading to a loss of about $120 million in property taxes and $30 million in Hudson County revenues, the report found.”

The state’s income tax money is collected to be used to fund education at the local level. That was the promise the elected politicians made when they imposed the state income tax 40 years ago. But then the unelected politicians got involved – in the form of the State Supreme Court. They did an end run around the solemn promise made to all taxpayers and spent most of our income tax money to pay for a handful of urban school districts — the so-called Abbott Districts.

These districts are home to powerful political machines and well-connected corporations so that even as many have grown richer and able to afford to educate the children of their own communities they haven’t had to step up and put their hands in their pockets. Even after Democrat Governor McGreevey’s own Education Commissioner said that many Abbott Districts were too rich to justify getting our money and even after the Supreme Court’s own report said that half the financially at-risk children in the state lived outside these Abbott Districts – even then, the money still came and the rest of the state suffered.

That’s why we can’t cut our property taxes in Sussex, Warren, and Morris Counties. Because so much of the money the state collects for education ends up supporting “gleaming corporate towers and luxury residential skyscrapers” in Abbott Districts, there is little left for our schools. And remember this: Every education dollar that isn’t funded by state income tax revenue must be made up for in higher property taxes. That’s why we need to put Fair School Funding at the forefront of the State’s legislative agenda for 2014-15.

There are too many families in my home county in danger of losing their homes, needing the county food bank, and having to make a choice between paying the property taxes or health care. Sure we have trees, but you can’t eat trees – and the Highlands Act, which was forced upon us by a Democrat administration and a Democrat legislature, puts us at a big disadvantage with other counties when it comes to job creation.

It is time for the Wall Street corporations who reside in places like Jersey City – firms like Goldman Sachs and Merrill Lynch – to be good corporate citizens and accept responsibility for the communities in which they earn so much profit. Pay to educate the children of your community so that we can afford to pay to educate the children of our community.

Assemblyman Parker Space, a Republican, represents Sussex, Warren, and Morris Counties.