Property Tax Overhaul Proposed By NJ Republicans

TRENTON, NJ — As Gov. Phil Murphy prepares to unveil his proposal for the state budget, Republican lawmakers pre-emptively pushed back with other ideas. GOP leaders will introduce legislation that would overhaul the state's contributions to school funding, which the minority party says will fully fund schools while lowering property taxes.

The plan from Republicans in the State Assembly would increase education aid by $1.2 billion for Fiscal Year 2024. The proposal would fully fund schools using the state's $6.5 billion surplus while requiring local governments to lower property taxes dollar for dollar, according to GOP legislators.

The bill detailing the proposals will become available Monday — one day before Murphy plans to introduce his proposed budget — an Assembly GOP spokesperson told Patch.

Once Murphy unveils his budget proposal to state lawmakers, which he plans to do Tuesday, legislators will then have several months to make adjustments. The Legislature must approve a balanced budget for the governor's signature before July 1, when the new fiscal year begins.

State-budget season is always contentious in Trenton. But this year's process includes the added significance of upcoming elections, with all State Senate and Assembly seats on the ballot in November. With Republicans hoping to take control of at least one chamber for the first time in 20 years, the GOP proposal may offer voters a vision for state-education aid that differs from that of Murphy and the Democratic majorities.

Education aid represents a significant portion of New Jersey's tax dollars. The state's $50.6 billion budget for the current year (Fiscal Year 2023) includes $9.9 billion in K-12 aid — $650 million more than the prior fiscal year's.

The Assembly GOP plan would increase state aid to fully meet the adequacy budgets of school districts the state's funding formula set in 2008. In return, districts would need to lower property taxes dollar for dollar, says Assembly Minority Leader John DiMaio.

"Murphy and the Democrats try to take credit for providing more funding," DiMaio (R-23) said in a news release, "but the state has never actually met its obligations, and property taxes continue to go up."

A spokesperson for the State Senate's Democrats declined to comment on the Republican plan. Patch reached out to the party's Assembly spokesperson and will update with any response.

Since the 2020-21 school year, the state has determined its annual distribution of education aid through S-2 — a controversial funding formula passed in 2018, Murphy's first year in office. Supporters of S-2 say the formula assists districts that were consistently underfunded through the prior school-aid formula, which passed a decade prior. Critics contend that the current formula has deprived other communities of much-needed educational aid.

"Hundreds of rural and suburban school districts have had their state aid cut or outpaced by inflation while they're contending with learning loss and plunging test scores resulting from pandemic school closures and remote learning," said State Sen. Doug Steinhardt (R-23). "This underfunding of districts throughout New Jersey occurred even as large increases in state aid were directed to a few of the biggest districts that already get the lion's share of funding."

Under S-2, all public-school districts in New Jersey will reach the goal of full funding by Fiscal Year 2025, according to the Murphy administration. Currently, increases in state aid don't require school districts to reduce property taxes, unlike the Republican proposal. Local governments in the state can only approve tax hikes up to 2 percent each year.

Murphy and Democratic lawmakers set aside the historically high surplus in the current state budget to help New Jersey prepare for the predicted economic slowdown.