New Jersey: How Does the 15.5% Tax Increase Affect You?

A tax proposal in Jersey City, New Jersey, projects a 15.5% increase in municipal property taxes. The measure sparked protests from residents in front of City Hall and opened a political clash between the current and former administrations.

Many residents warn that the increase will raise the cost of living and could force them to move to other cities or states. The municipal increase is part of an $886.5 million budget that the Municipal Council submits for final vote.

Why is the city proposing to raise taxes?

Mayor James Solomon’s administration defends the measure as a necessary step to close a structural budget deficit. The mayor’s office argues that a financial audit from August detected deferred obligations and overdue payments from previous years totaling $94.1 million. The initial proposal contemplated a 20% increase, but was reduced to 15.5% after negotiating spending cuts and outside assistance.

The city projects cutting nearly $58 million in operating expenses and receiving a state assistance package of $120 million. Former Mayor Steven Fulop rejected the validity of the report and accused Solomon of using the audit for political purposes.

Fulop maintained that the report never proved an overall deficit of $250 million as sectors of the administration claimed. As the dispute between political leaders continues, local taxpayers face the burden of paying the municipality’s outstanding bills.

How does the increase affect homeowners and tenants?

Property taxes in New Jersey consist of three parts: the school portion, the county portion, and the municipal portion. The 15.5% increase applies directly to the portion that finances Jersey City’s municipal services. For an average residential home, the municipal impact will represent an increase of approximately $51 additional per month.

To that figure must be added the increases approved by Hudson County, which raises the total annual cost. Tenants are not exempt from the consequences. Landlords typically pass tax increases to rental contracts upon renewal.

Residents like Dmetriotis Van De Mark, a 31-year resident, told CBS News New York that remaining in the city has become economically unsustainable. For working Hispanic families, any increase in housing competes with purchases of food, gasoline, health insurance, and essential medications.

What options do New Jersey residents have?