N.J. was better off without special tax breaks and carve-outs. From South Jersey Times.

Featured Image Above:  Democrat Joel Parker relentlessly opposed special tax breaks to promote “economic development” for industry, especially railroads.  During his second term as NJ Governor (1872-1875) Parker pushed through an amendment to the NJ State Constitution requiring that all property be “assessed at same standard of value” and “taxed at the same rate”.  That “uniformity clause” is still part of our state Constitution.  However, amendments after World War II later created exceptions for veterans, farmers, seniors, and real estate developers of “blighted” areas.  During his first term as NJ Governor (1863-1866), Parker was known for his harsh criticism of Republican President Abraham Lincoln during the Civil War.

Gov. Phil Murphy and top New Jersey Democrats today are the party of special short-term deals for selected people. They have settled on a $50.6 billion fiscal 2023 budget that spends $2 billion on a so-called “ANCHOR” tax rebate” for homeowners and residential renters.

They’ve also included a 10-day back-to-school sales tax holiday for selected retail purchases. Neither plan offers any tax relief for businesses. So, those businesses will simply pass the higher cost they’re paying for government back onto those homeowners and renters through higher prices of goods and services.

Democrats were not so short-sighted 150 years ago. Back then, there was only one broad-based tax imposed on New Jerseyans, the local property tax. In 1875, Democratic Gov. Joel Parker even pushed through an amendment to the old state constitution requiring all property to be “assessed according to the same standard of value.”

When New Jersey embraced that idea, it became one of the richest and least taxed states in America. During that time, we had excellent police, schools and roads. The fastest trains in the world went to and from Atlantic City. Thomas Edison, inventor of the light bulb and more, set up his laboratories in New Jersey. We manufactured everything from automobiles to pharmaceuticals.

All of that changed 75 years ago when Democrats and Republicans alike started winning elections by offering special tax deals to special groups. Under a 1947 constitution overhaul, the state created its first tax breaks for real estate developers who improved “blighted areas.” An amendment in 1954 added tax breaks for veterans. The state also offered these for senior citizens in 1961, and, in 1963, for active farm property. In 1966, the constitution was again amended to give everybody “property tax relief” with a new 3% sales tax. In 1976, a state income tax was added, starting with a 2% rate.

However, property tax rates and most bills have gone up every time politicians gave us “more property tax relief.” Today, New Jersey’s real estate taxes are the highest in the nation, and its sales tax and its top income tax rate are among the nation’s highest. Our state government has roughly $248 billion in combined debt and public pension obligations, the second highest in America. The reason is obvious.

When the 1875 state constitution forced everyone to pay taxes at the same rate, all voters had one simple way to attempt to control their taxes. They had to pay attention to local politics and elect officials who were capable and honest.

Bur, when politicians and voters repeatedly agreed to change the constitution to give special tax breaks to certain groups, it became easier for the richest and most powerful groups to elect candidates who would cut their taxes and raise them for everybody else — even when those winning candidates were corrupt and incompetent.
We’ve seen the way this works in Atlantic City. Since the 1980s, a handful of casino hotel owners held more than half the taxable real estate value in the city. At first, they had a direct financial interest in helping politicians and civic groups who supported honest and efficient government, and lowered their taxes.
All of that changed in 2016. That year, the Democrat-majority Legislature and Republican Gov. Chris Christie enacted a state law that exempts all of Atlantic City’s casinos from paying county, local, and school property taxes in the typical way. Instead of assessments of property value, the gaming complexes now pay for schools and local government with a PILOT (or, payment-in-lieu- of-taxes) agreement.
Each casino’s payments are determined by the amount of its gambling receipts, not how much is spent by local government and public schools. Casino owners no longer have any skin in the local politics game.
For the first five years, this was tolerable. Internet gambling receipts were included in calculating the PILOT amounts each year. However, in December, Gov. Murphy and the Legislature changed the law to exclude internet revenue — which the casinos complained are split with third parties that run gaming sites. As a group, the casinos are paying much less. One projection estimates they saved $41 million over what they would have otherwise paid this year. This lost revenue has to be made up by the other property owners in Atlantic County.

This may not be constitutional. The general rule that all real estate be taxed equally is still part of our state constitution. It was never amended to create a tax break for casinos.

Seth Grossman, an activist and attorney from Somers Point, was an Atlantic City councilman, a 2013 Republican primary gubernatorial candidate, a 2018 congressional candidate and a candidate for state Senate in last year’s GOP primary.

LibertyAndProsperity.com is a tax-exempt, non-political education organization of roughly 200 citizens who mostly live near Atlantic City, New Jersey.  We formed this group in 2003. We volunteer our time and money to maintain this website. We do our best to post accurate information. However, we admit we make mistakes from time to time.  If you see any mistakes or inaccurate, misleading, outdated, or incomplete information in this or any of our posts, please let us know. We will do our best to correct the problem as soon as possible. Please email us at info@libertyandprosperity.com or telephone (609) 927-7333.

If you agree with this post, please share it now on Facebook or Twitter by clicking the “share” icons above and below each post.  Please copy and paste a short paragraph as a “teaser” when you re-post.

Also, because Facebook and Twitter falsely claim our posts violate their “community standards”, they greatly restrict, “throttle back” or “shadow ban” our posts.  Please help us overcome that by sharing our posts wherever you can, as often as you can.  Please copy and paste the URL link above or from the Twitter share button to the “comments” section of your favorite sites like Patch.com or PressofAtlanticCity.com.  Please also email it to your friends. Open and use an alternate social media site like Gab.com.

Finally, please subscribe to our weekly email updates.  Enter your email address, name, city and state in the spaces near the top of our home page at Homepage – Liberty and Prosperity.  Then click the red “subscribe” button.  Or email me at sethgrossman@libertyandprosperity.com or address below. Thanks.

Seth Grossman, Executive Director



(609) 927-7333


Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top