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Saturday, March 6, 2010

About that 'State Aid' notice on your tax bill

This notice appeared at the top of your tax bill.

Plainfield taxpayers received their FY2010 first- and second-quarter tax bills (belatedly) this week, and a notice at the top of the bill caught many people's attention.

In fact a reader was quite upset about it and posted the following comment on Thursday --
This comment doesn't have much to do with the article - maybe peripherally - but i see no references in your blog to this issue, so here goes.

Yesterday I got a letter from the City of Plainfield - tax advice about property taxes. For this year my property tax is around $7,000. OK I can live with that, an incremental (i.e., Small) increase from last year.

What scared the HECK out of me was the message in a box at the top, to the effect that Due to state aid, Plainfield does not have to charge me the REST of my property tax which is $12,000.


I have never seen a notice of this nature on the tax advice before. This notice freaked me out and had me upset all day long. I called up Cory Storch to ask about it but he never returned my call. I am concerned that tripling my property tax would drive me out of my home.

I was very worried all day long. Then I went out to dinner and mentioned this issue to my dinner mates.

One of them is a retired Tax Manager and she explained to me that since Plainfield has Urban Enterprise Zones, part of the deal with that is that they do NOT charge me that extra property tax unless they lose their UEZ.

Essentially that whole notice in the box was a Scare Tactic. Plainfield wants me to think that if Gov. Christie cuts aid to municipalities, then my taxes will go up $12,000 per year.


Brought to me by the Democratic government of Plainfield.

I imagine a whole lot of other homeowners got this notice and are similarly scared.

You should cover this issue.
Let's give it a try.

What does the notice say?

The budgets of the government agencies funded by this tax bill include
State aid used to reduce property taxes. Based on the assessed value,
the amount of this State aid used to offset property taxes on this parcel

Can we parse that? --
  • government agencies funded by this tax bill: your property taxes are allocated not only to City government, but also the Plainfield public schools, and the County government (plus an Open Space Tax, not germane to this issue)
Keep in mind that Plainfield gets $100 million in state aid for the public schools, dwarfing the City's own budget and the measly $250,000 the city got in aid last year; this alone should account for a great deal of the dollar figure.

What is not made clear is any relationship between any or all of the 'government agencies' referred to.


Though the tax bills are FOR the City of Plainfield, and bear a Plainfield return address, taxes are actually computed at the County level. That is true throughout New Jersey's 21 counties. The counties are charged with seeing to it that the expense of running the County is fairly distributed among its municipalities, each of which has different assessed valuation scenarios. So, EQUALIZING each community's fair share of the County tax burden is the County's first task. Then the tax levies set by other bodies (municipality, school district, and -- in some cases -- fire districts) within the County are added in.

The total tax bill for each community in the County is actually computed by the County, and printed out as a statement with the municipality's name on it. These are then mailed out as the tax bill that we receive.

So, the bill is NOT 'a scare tactic by the Democratic government of Plainfield' unless you want to believe that the bills mailed to Westfield or Summit residents, containing the same notice, are scare tactics by the Republican governments of those towns.


As for the commenter's friend's explanation that the Urban Enterprise Zone (UEZ) is involved, this is not the case.

The state's UEZ's are funded from SALES TAX RECEIPTS (not property taxes) in the designated zones. Belonging to a UEZ allows the participating businesses (not every business in a UEZ is qualified or tries to take advantage of the designation) to charge ONE HALF the state sales tax on certain purchases. Each UEZ's receipts are set aside in Trenton, the funds to be managed by the state for reinvestment in the local community by approval of projects submitted as project requests by the individual communities. Property owners in a UEZ are not excused in any way from their

While the whole Urban Enterprise Zone program has nothing to do with your property taxes, the program has not escaped Gov. Christie's attention. Talk of using the UEZ fund pool toward the state's deficit would mean local UEZs would lose their fund balances and would be unable to fund proposed projects for the foreseeable future. (This could, for instance, impact the Mayor's proposed summer concert series.)


This is where taxpayers need to focus their attention. With the dissolution of the Abbott school districts (by way of legislation strongly supported by Assemblyman Jerry Green), state aid to local school districts will be reformulated over a period of time.

Per-pupil state aid for some area school districts.

While state aid to Plainfield's public schools would not disappear, the amount could change substantially now that aid will be calculated on the number of economically disadvantaged students IN EVERY SCHOOL DISTRICT STATEWIDE, and not just the so-called Abbott districts. Though the impact was to be delayed, I believe that was for TWO YEARS only, and that we are coming to the end of the second year, after which the decreased aid figure is to be worked into the local tax picture by a GRADUAL INCREASE in Plainfield's school tax burden, which has been relatively stable for more than a decade. (If I misunderstand this, I will gladly stand corrected.)

To this, we must add the threatened impact of Gov. Christie's proposal to scale back aid by up to 15% in the next state budget (which would be his first, starting on July 1, 2010). This is truly the scary part, and you can be sure that DEMOCRATIC LEGISLATORS (most of the Abbott district communities -- if not all -- are Democratic-leaning) will be mounting an offensive to soften that proposal as it affects their communities.


Could the Tax Bill notice be clearer? Yes. Should you be worried? Yes, but because of the state's fiscal situation, not because of the inept and confusing tax notice.

-- Dan Damon

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Anonymous said...

I think we are confusing money with education. We spend more money per pupil than Middlesex etc, and our standing in the food chain is way below.

Money is not the answer to getting children educated, it is the teachers and the environment.

The kids don't have text books for God's sake!!! Where is this money going????

Rob said...

What you will NOT hear from the NJEA nor Jerry and his ilk is that because there is SOOOOO much blatant and disgusting waste including an overbloated middle management mentallity pervasive in the "districts formerly know as Abbott" that they will look at all possible ways to cut waste, fraud, abuse and non-essential administrative jobs. Rather what you will hear is "can't buy text books, no class trips, no sports, no music, no art and less teachers".
That is all you will hear. Not once will they consider eliminating wasted management jobs because that won't serve the NJEA and the Democrats in Trenton and locally. They will screw the kids, mark my words, NOT the gravy train the system of "take" has provided the Abbott districts.

Anonymous said...

It seems clear that when you see the bloated size of the BOE, that education costs and the cost of education are two very different things. Plainfield spends an enormous amount of money developing plans that never get implemented. Consider the ratio of direct teaching staff, in Plainfield, to total Schools staff and you will see the waste. Worse consider the cost of direct teaching staff to the total cost of the Schools staff and cry.
The goal of any system is to improve, but there seems little doubt that you could take 25 million out of the Plainfield school budget and keep the test scores steady at their 3rd world rate.
Perhaps we can outsource the job of running our school district to some other town that has a proven track record of student success at a reasonable cost.