It’s the taxes, stupid.
At the height of the last recession, “It’s the economy” became the refrain pundits and angry Americans used to remind politicians of the bread-and-butter concerns of John and Mary Q. Public struggling to make ends meet.
This week, as Mayor Jerramiah Healy prepares to deliver his State of the City Address on Wednesday, March 16 at 6 p.m., local residents seem to have their own twist on this old catchphrase. Ask them what issues matter most to them and they can boil it down to one word: taxes.
Nearly every resident interviewed last week, including a number of renters, identified rising property taxes as a top concern facing their households. Even when people touched on other problems in their neighborhoods – filthy streets, parking enforcement, snow removal, potholes – the conversation seemed to always return to their top concern: What should be done to stabilize property tax rates in Jersey City.
What do Jersey City residents think about the current state of their city?
________
Solomon, who currently rents on Monmouth Street, said high property taxes in Jersey City now have her looking at condos in North Bergen, a city that has a more stable tax rate.
Joel Rennie, an acquaintance of Solomon’s who lives on Fourth Street, also downtown, said he owns a two-family home he shares with his sister and her husband.
“All three of us work but somehow we can just barely keep up with the property taxes on the house,” he said. “It takes three full-time working adults to pay the taxes on that thing. And we’re lucky. Our mortgage is low and the house is almost paid off. I don’t know how other people do it.”
Rennie added that he’d like Healy to specifically address what he plans to do to stabilize property tax rates, especially for longtime residents like himself. The Rennie family, he said, came to Jersey City when he and his sister were teens.
When asked why taxes in Jersey City are high, Rennie and Solomon quickly zeroed in on another issue raised by their neighbors: abatement agreements.
Typically, abatements are property tax breaks offered to attract developers to a city or community that’s in distress. A city will get from the developer an annual fixed “service charge” instead of property taxes. (In the case of abated residential property, these tax breaks are passed along to people who buy units within the abated property.)
The service charges from abated properties go straight to the municipal budget, rather than to the schools and county as well, leaving other property owners to foot those costs.
Jersey City has been using abatements to attract development to the city since the 1970s and initially used abatements to spur progress at its abandoned waterfront. But critics of abatements believe Jersey City no longer needs to use such incentives along the waterfront, which is now fully populated with luxury rentals, condos, and office buildings.
“I wonder if he’ll even discuss abatements,” Jenny Wu asked of Healy’s upcoming address.
Wu and her husband of three years live in Aqua Blu, an abated property on the waterfront in the Newport area. Wu admits she knew nothing about abatements when the couple first moved to Jersey City.
“Well, I now understand that a lot of these newer condo pay lower tax rates. So, yeah, we’d love to pay lower taxes. Who wouldn’t,” she said. “But we hope to have a baby pretty soon and I don’t want to raise my kid in a condo. I want to be in some kind of a house. But I’m realizing those [older] properties don’t get these abatements.”
She admits the couple is in a bit of a Catch-22.
“I guess these abated properties kind of don’t pay enough [in taxes], and that puts a burden on other” taxpayers, she said.
Drew McGuire, another downtown resident, was more pointed in his comments about abatements.
“Is Healy going to take questions from the public? If so, I’d go [to the State of the City Address] just to ask him about these abatements,” said McGuire. “The waterfront, near where I live, is not at ‘at risk’ community. It’s not poor. There isn’t a lot of crime. Property values seem high. So, why is the city extending abatements to developers? I think it’s hurting the city financially. It’s one of the reasons we seem to always have a deficit.”
The budget
Healy has proposed budget of $477 million for the next fiscal year. The city hopes to avoid new property tax increases in that year.
The city’s current deficit is nearly $80 million, although at last week’s City Council meeting, Business Administrator Jack Kelly said the Healy Administration expects to close this gap. He didn’t give any details as to how this will be accomplished. A recent plan to lay off cops was scaled down.
McGuire, who owns a small home on Sixth Street with his wife, said he also has a lot of questions about the city’s upcoming revaluation of properties, a process he’s worried will mean higher property taxes.
Jersey City hasn’t done a reval – a citywide appraisal of property values – since 1988 when many downtown homeowners claimed their land was inaccurately assessed, which led to huge tax increases.
Properties that are underassessed will probably have to pay more, and newer properties with accurate assessments may see less of an impact. Abated properties will not see their tax rates increased as a result of the reval since their tax rates are fixed as a part of the abatement deal offered to the developer.
The State of the City will be given at City Hall, 280 Grove St., and is open to the public.
E-mail E. Assata Wright at awright@hudsonreporter.com.