As Realty Taxes Go Up, Up, Dreams Die in New Jersey
By Peter Kerr, Special To the New York Times
Much of the often angry politics in Trenton these days boils down to the kind of numbers that torment Angelo Verduci, a 74-year-old retiree in this fast-growing suburb. His income: $13,000 a year. His property taxes: $2,654 and rising. Mr. Verduci fears that taxes will some day force him to leave the small cement house that he built himself 30 years ago, when much of Middlesex County was still rural. In the meantime each increase in property taxes cuts into his budget for food, clothing and medical care. No Thought of Moving "This is a place I built to live and die in," said Mr. Verduci, whose property taxes rose 20 percent, more than $400, last year. In this state of bedroom communities, where Democrats depend on the votes of modest homeowners, rising property taxes have seared the electorate and deeply divided the party. Property taxes are a growing frustration across the state, in wealthy communities as well as middle-class ones, as soaring garbage-disposal bills, expensive labor contracts, a decline in Federal aid and other factors drive up the cost of local government and schools. For the less affluent, and particularly people on fixed incomes, the rising taxes on their homes can rouse the kind of anger more often associated with issues like race and crime. Cutting to the Bone "It's gotten to the point where we've cut everything to the bone," said Mr. Verduci's son Bradley, a 44-year-old mechanic who lives next door with his wife and two children. Taxes, he says, have forced him to think of leaving the neighborhood. "One more rise in taxes, and it will be very hard to make it, to pay our bills." People like the Verducis, lifelong Democrats with conservative social leanings, were the type of New Jersey voters who often decided elections in the last decade, giving victories to Presidents Ronald Reagan and Bush and to Govs. Thomas H. Kean and Jim Florio. Realizing the importance of property taxes to people of modest means, Governor Florio promised them property-tax relief last year as he pushed through the Legislature $2.8 billion in sales, income and other tax increases. Part of $1.3 billion in higher income taxes imposed on the state's top 17 percent of wage earners was aimed at reducing property taxes, with the rest marked for more aid to the state's poorer school districts. Little Help Envisioned Now some Democrats, including the President of the State Senate, John Lynch, say Mr. Florio's plan will do too little to help people like the Verducis. By miscalculation or plan, they say, the Florio tax package will pour hundreds of millions of dollars into poorer schools but permit, or even require, property taxes to rise for most people. Mr. Lynch has proposed stripping $395 million from the Florio school plan and directing it to municipalities to help keep property taxes down. In 1988, New Jersey had the third highest per-capita property taxes in the United States, according to a preliminary study of United States Census figures gathered in the fiscal year beginning July 1987. For every resident, $933 in property taxes was collected, compared with $860 in New York and $911 in Connecticut. Alaska had the highest property taxes, followed by New Hampshire. Recession Makes a Difference Between 1989 and 1990, property taxes rose substantially in New Jersey, said Ernst C. Reock, director of the bureau of government research at Rutgers University. County taxes rose an average of 9.8 percent, municipal taxes 12.4 percent and school taxes 13.1 percent. But the consternation over property taxes, particularly among middle- and lower-middle-income New Jerseyans, goes beyond those numbers, Mr. Reock said. Rising property taxes were not felt so much through the 1980's as the economy boomed, salaries rose and the value of real estate advanced steadily. With the onset of the recession and sharp drops in property values, wage earners who believed they were increasing their wealth merely by owning a house now feel they have lost money. And people who believed they could make up for higher taxes with steadily rising salaries now face flat incomes and the fear of unemployment. "What complicates matters is that people in the 1980's got themselves into a position where they were living at the edge of what they can afford in good times," Mr. Reoch said. "Now they have slipped below that level." Acute Problem in Edison In Edison, a sprawling township near the convergence of the New Jersey Turnpike, Garden State Parkway, Interstate 287 and Route 1, property-tax problems are particularly acute. Through the 1980's it was one of the fastest-growing towns in the state, lifting its population by 26 percent -- to 88,680 from 70,193. And for years the government kept taxes relatively low by selling municipal lands in deals that now are being criticized by some residents as grossly mismanaged. In 1990, residents saw their property taxes rise 19 percent -- from $1.36 for every $100 of assessed valuation to $1.63, said Paul Raffiani, Edison's Tax Assessor. In previous years taxes had risen at 7 to 8 percent a year. To Elizabeth Conway, another Edison resident, there is little doubt that the state must turn its attention to the property-tax burdens of less affluent suburbanites. At 36, she and her husband look back on the years when they both worked, saving money so she could stay home to raise children. Now her husband's job is threatened: he works as a heating and ventilation specialist in a largely empty office building that once housed the investment firm of Drexel Lambert, which has gone bankrupt. Meanwhile property taxes on their three-bedroom colonial house have risen to $100 a month this year. Ms. Conway says life for her children, aged 5 and 2, will be far different than originally planned. There will be no vacations to Disneyland in the winter, no summers away from home. If things get tougher, Ms. Conway expects she will have to return to work. Living Precariously On Ethel Road, where the two generations of Verducis live side by side, the mood is particularly dark in the home of the elder Verducis. Both Angelo and Mary, who is 73, recall arriving in the area from other states as children, when Ethel Road was farmland where Angelo would hunt for wild asparagus and pick blueberries and huckleberries for his mother to make jelly. Out of the Army in 1946, Mr. Verduci paid $675 for a plot of land, and together with his father-in-law, who bought the adjacent plot, the two men spent 13 years building the homes at night after Mr. Verduci finished working his shift as a technician at the Squibb Corporation. He retired in 1979. In the last year the property taxes for the elder Mr. Verduci and his wife rose from $2,162 to $2,654. With one out of five dollars of their fixed income going to property taxes, there is not enough money for a movie or an unplanned drive. Both he and his wife live in fear of getting sick, for just about any doctors' bills are beyond their budget. Most of all, Angelo Verduci fears that new increases in property taxes will make it impossible for them to keep their home. Next door Bradley Verduci said that until recently he had thought he could sell his home, which tripled in value during the 1980's to $149,000, according to the Town Assessor. But the idea of moving to North Carolina dissolved with the eroding real-estate market, which in many New Jersey suburbs has seemingly produced a "For Sale" sign on every other front lawn. The new austerity in Bradley Verduci's home has meant, for example, that he was forced to delay for months a $300 repair of the kitchen stove. His wife suddenly found herself doing all her baking next door in her mother-in-law's kitchen. "Even if they put a freeze on my taxes, it still would be out of proportion to what I can afford," he said.