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Government is a beast that just feeds on itself.
New Jersey has some of the highest property taxes in the country but the politicians can only see what they can not spend. During the run up of housing prices these politicians grabbed every possible dollar and added services to buy votes work towards their self aggrandizement. The thought of a tax rebate or rainy day fund never crossed their minds.
Now that housing sales have slowed down and property values could be dropping, the politicians are getting nervous. Transfer taxes are down across the state by 89 million and property taxes are sure to follow as people will not be content to pay taxes on a valuation that is too high.
But do the politicians think to cut services that are not needed. Hell no. Instead they are already sending out their minions to warn of even higher property taxes. So the poor people of New Jersey will be looking at even higher property tax bills to fund services that most will not use or ever see.
But it will provide a paycheck to someones nephew so it is all worth it, right?
Taxpayers across the state could face bigger county property tax bills as a result of at least an $89 million drop in realty transfer fees last year.
Everyone went into the housing boom thinking it would last forever,” said Donald Scarry, president of New Jersey Economics, a Mount Laurel-based economic policy-consulting firm. “For many there will be no way to make it up, other than higher property taxes.”
Revenue to New Jersey’s 21 counties from the fees that are paid to county clerks for recording documents in real estate transactions dropped by about $21 million last year. via NJ.com
2 comments ↓
Taxes in NJ are already so high, that you could work all your life, pay off your mortgage, and still not be able to afford to live their in retirement, because of the tax bill. I lived there from ‘90 to ‘94.
Tom,
Thanks for this post pointing out some state level wacky government tricks.
So, in summary, here’s what let’s do in the midst of a lousy housing market with disappearing credit markets:
1. On the federal level, because credit is much more difficult to come by, let’s pile on a bunch of reactionary regulation for mortgage loans.
2. On the state level, let’s raise property taxes using the Jersey model since property values are declining.
3. On the local level, perhaps some form of zoning regulation–I don’t know, say requiring new homeowners to rebuild their kitchens or something when homes transfer.
Really, anything to make current owners to pay more and to make buyers stay on the sidelines. That ought to help the market.
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