According to a report released this past week by EdBuild, New Jersey’s highest-in-the-nation figure for basic per-pupil education spending is considered generous, but it also expects local communities, rather than the state, to pay a large portion of that funding. And while it considers property wealth and household income levels in determining a community’s ability to raise local taxes, in reality, there’s little actual correlation between income and the school tax rates that are set.
Moreover, when there are cuts to state aid, districts with a lower property tax base or lower-income residents are most affected, as they’re called on to pay higher property tax rates to compensate for the loss in state funding, notes the report, titled “Building Equity: Fairness in Property Tax Effort for Education.”
As a result of the state’s regressive tax plan, residents in communities with the highest property wealth are taxed at rates 35 percent lower than those in districts with the least property wealth, according to the report, which highlighted New Jersey as one of three case studies.
EdBuild examined 18 states, suggested policymakers keep in mind taxpayers’ ability to pay when setting school tax rates as well as the relationship between how much districts should spend to educate their students — based on a state’s funding formula — and how much aid they actually receive from the state.