New York, New Jersey Counties Lead in Property Taxes

From Bloomberg.com:

The counties of Westchester, New York, and Hunterdon, New Jersey, charged the highest property tax bills in the U.S. during 2006-2008, the Tax Foundation said. All of the 10 top-paying counties were in the two states.

The median annual tax bill in Westchester, north of New York City, was $8,404 in the three-year period, the Washington, D.C.-based research organization said today in a study based on U.S. Census data. Hunterdon homeowners paid $8,347.

“In seven New Jersey counties and three New York counties, the median property tax over 2006-2008 is more than 7 percent of median household income, compared with the national median of 2.85 percent,” the study said.

New Jersey’s property taxes are an issue in the state’s Nov. 3 election for governor. Democratic incumbent Jon Corzine said on Oct. 23 he would halt growth of property taxes if re- elected. Republican challenger Christopher Christie said he would cut taxes across the board.

New Jersey ranked first among states with a $6,320 median property tax bill in 2008, Census Bureau data last month showed. States with the lowest median real-estate taxes last year were Louisiana, $188; Alabama, $383, and West Virginia, $457, the bureau said.

“The Northeast remains the area with the highest property taxes,” Gerald Prante, a Tax Foundation economist, said at the time. “These states also have high per capita income, and the highest property tax bills, in terms of dollar amounts, are usually found in the areas with the highest incomes.”

The top 10 counties for property tax bills in 2006-2008 were: Westchester, New York, with $8,404; Hunterdon, New Jersey, with $8,347; Nassau, New York, at $8,306; Bergen, New Jersey, with $7,997; Rockland, New York, at $7,798; Essex, New Jersey, with $7,676; Somerset, New Jersey, at $7,676; Morris, New Jersey, with $7,310; Passaic, New Jersey, at $7,095, and Union, New Jersey, with $7,058. The national median is $1,854, the Tax Foundation said.

The Public Pension Bomb

States all over the country are running into problems with the retirement funds setup for their employees. CNNMoney.com recently posted an inn-depth article on how this problem is playing out now in New Jersey. You can find a segment of the story below, or read the full post here.

For years, states all across the country have been starving their retirement plans. Here's a look at how the crisis is playing out in New Jersey, where the bill is coming due, and the state doesn't have the money to pay it.

Even as the nation's economy is showing some tentative signs of bottoming out, another calamity looms: the public pension bomb.

For years, states nationwide have shortchanged the retirement programs that cover teachers, police, and other public employees; now the stock market plunge has wiped out billions of dollars from already underfunded plans. California, New York and Illinois are among the states scrambling to plug multibillion-dollar holes in their pension systems. The growing obligations raise the specter of higher taxes, diminished services, or even another round of costly federal bailouts.

"States have long needed to reduce their unfunded liabilities, and widespread investment losses have made it even more necessary to put money in," says Lance Weiss, author of a 2006 Deloitte study of state pensions. "But the market crash also means there's less money available to use for contributions. Everything is coming together to create a crisis."

To better understand this ticking time bomb it helps to focus on a single state, and New Jersey makes a compelling case study. For one thing, its situation is dire. In June 2008 the state estimated that the plan - one of the nation's largest, covering teachers, state employees, firefighters, and police - had $34 billion less than it needed to meet its obligations. Since then the market value of the plan has dropped from $82 billion to $56 billion (a new estimate of underfunding is due in July).

Also, New Jersey is in some ways ahead of the pack in trying to deal with the crisis - Gov. Jon Corzine, a Democrat, made addressing the problem a central theme of his 2005 campaign - and the obstacles it is encountering shed light on the hard choices facing other states.

"The pension obligations could spark a huge problem for New Jersey," says Thomas Kean, a former Republican governor. "They must be paid because they are absolutely an obligation of the state, but as it is, the budget is balanced with chewing gum and sealing wax."

To figure out how such a wealthy state (with a median household income of $65,933, New Jersey ranks No. 1) dug itself into this hole, set the clock back almost 20 years.

In 1990 the country was hit by a recession, and the new Democratic governor, James Florio, responded with a wildly unpopular $2.8 billion income and sales tax increase to balance the budget. Two years later, facing another budget shortfall, he turned to the state pension system for help. With almost unanimous support in the legislature, he pushed through the Pension Revaluation Act of 1992.