As usual, the developers had union workers at city hall to support tax break on three properties in JC, two in downtown which is already overbuilt. In the past, developers demanded tax abatements because interest rates were in the double digits, now interest rates are near zero percentage and they still demand abatements. To sweeten the pot, the developers and public officials have linked affordable housing with abatements to make it more palatable.
Our public officials like to ignore the rising Board of Education tax rates due to more children coming into the school system from tax abated development. Affordable housing gives no relief to the already over taxed homeowner and it pay no money to the Board of Education. It is now time that all buildings that have tax breaks pay an extra assessment that goes to the Board of Education. Since 2005, the Board of Education taxes have increased an extra $38 million and will continue to increase each year.
On the same night as these three abatements were granted, it was also the city’s budget hearing. While public officials like to be generous with our tax dollars with developers, the reality is the city or really taxpayers are responsible for $59 million compensated absences liability for retiring employees in the future, it must pay close to $60 million in debt service this year, and have projected $158 million in future projects.
Before the city bails out a developer or worry about future jobs for construction workers, it better get its financial house in order, if not then JC faces the same fate as Stockton, California which declared bankruptcy and slashed many services to its residents and is considering stopping health benefits to retired employees.
Abatements are the reason the JC cannot gets its finances in order because abatements do not add to the ratable base which is presently $5.7 billion. If properties were not abated then $2.4 billion would be added to the ratable base. It is simple math the higher the ratable base, the lower the taxes, or in JC case, the lower the ratable base the higher the taxes.