Corruption, Blue Laws and More: Why New Jersey and New York Have The Highest Property Taxes

Updated on

Corruption, Blue Laws and More: Why New Jersey and New York Have The Highest Property Taxes

$30,000 clock

Part I

Ramapo is a suburban town located about 25 miles outside New York City. It is the largest township in Rockland county. Ramapo is similar to many other suburban communities in many ways; many middle class families, diverse communities, soccer moms, and moderate voters. However one thing makes Ramapo very unordinary, in that it has the highest property taxes in the nation (according to various studies). Additionally, Ramapo is not the only town with high property taxes, virtually the whole New York City metro area has high property taxes as discussed in part I.

Where does all this money go? As someone who lived over two decades in Ramapo it is quite shocking. Slight facts and names are changed/omitted to protect the innocent, but let us examine further:

East Ramapo is the largest district as mentioned above. The district is unique in the fact that 75% of students attend private school. These schools do not get any Government services besides for bus transportation. Property taxes go to these schools, right?

There is a certain block in East Ramapo with about 50 families and 200 children. Only five of these kids go to the local public school. Property taxes on this block are $25k a year! The local school was running out of students because all the other kids attended private school. The school has thirty acres of land most of which is sitting idle. The school was offered $10 million for the unused land and refused. Additionally the school buses in children from other districts to justify keeping the school operating. Finally this school got Federal money from the Stimulus package of 2009. One block away people are paying millions for this unneeded school.

Thats not all, East Ramapo is one of the safest communities in the country. In 2011, it was rated the third safest community in the country, and in 2010, the safest town in America. However it is not because the amount of policemen has  been going up, merely their salary. There is very little crime as the community has little drugs, violence etc. Speaking to retired police officers, I have been told that the average police is $150k a year and the police chief makes $400k a year.

The supervisor of the town wins every re-election due to block voting. He lives in a nice mansion in a nice part of East Ramapo. The supervisor decided to install $30k big clock towers across the town. While the town could use sidewalks on many streets, these clocks serve zero purpose. Likely the maker of the clocks is associated with the supervisor in some way.

There is a lot more corruption and wasteful spending but no one wants to read a 100 page article.

These might be some of the reasons why East Ramapo spends $25k per ‘student’, as opposed to the New York State average of $17k (New York has the highest rate in the nation)!

Is East Ramapo an anomaly? Perhaps but Bergen County right across the border in New Jersey is a county with very high property taxes. The community has many extremely wealthy communities. The public schools are a bit better there but again there seems to be a lot of money wasted.

Bergen County has blue laws. These outdated laws were mostly instituted for religious reasons over a century ago. Blue laws state that stores selling non essential goods have to be closed on Sunday. Sunday is a big shopping day, and many people even come to New Jersey to shop because there are no sales taxes on many items. Since Sunday the malls are closed, Bergen County loses a lot of tax revenue and businesses suffer as well. Governor Christie estimates that New Jersey loses $65 million each year in tax revenue due to Bergen County Blue Laws. Another reason why property taxes are so high in the New York/Jersey suburban communities.

Finally the reason why property taxes are so high is because politicians know that they can raise taxes every year. Since New York is the financial capital of the World, people are forced to live in New York or the surrounding suburbs to commute to work (why the financial hub of the world was built on an Island is Part III).  In other metro areas where there are easier ways of getting to work local corrupt politicans wouldn’t be able to raise property taxes every single year.

That explains the chart below, notice any trend?


Part III to follow shortly.

Disclosure: Disgruntled home owner with one of the highest property taxes in the nation.

Leave a Comment

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!