I attended St. Peter’s tax abatement conference and was disappointed by the one-sided stance on this issue. The panel was moderated by a developer, an attorney for developer, public officials that push development and some professors. Where are the homeowners who are affected by tax abatements on that panel? It was definitely one sided.
What I find interesting was how the history of tax abatements was distorted. The public heard about how tax abatements changed Colgate through this process but that is only part of the story. In the early 1980s Colgate announced their land was too valuable to be a factory. That statement was echo by then Mayor McCann which played into the 1985 election. Many factory workers especially Colgate factory workers gave their vote to then Councilman Cucci. So why would newly elected Mayor Cucci give Colgate a tax abatement when Colgate announced their land was too valuable? Simple, it had to do with our school cost.
Previously, Mayor McCann underfunded the public schools and the state asked newly elected Mayor Cucci to increase the school funding by $20 million. So Cucci approached developers to repay their taxes. This is the real reason for tax abatements. Development was happening in Jersey City without long term tax abatements, Dixon Mills was an example of that.
In 1989 McCann won a second term as mayor and he proceeded to cut the school taxes, but then the school was in state takeover and the state did not allow this. The state did freeze our contribution to $72 million but that cap was removed in 2005 and taxpayers are now contributing $112 million. The more Jersey City creates affordable housing the more is the need for schools, which is a real burden to the small homeowner which should have been part of the discussion by the panel.
In my opinion tax abatements have hurt the small homeowner and have artificially increased their taxes since tax abatements are not ratables but contracts and only ratables are used to determine the tax rate. Every year Jersey City sells the tax liens of basically small homeowners who cannot pay the municipal, school and county taxes, so affordable housing is not addressing that problem. In fact affordable housing is hurting the small homeowners who must shoulder more school and county costs for affordable housing residents. An example of this is the second round of tax abatements for Salem Lafayette, which now has sixty-six year tax abatement after Mayor Fulop extended another thirty extra years.
There is nothing fair about tax abatements for the small homeowner.