For the second straight year, the State Budget requires urban or “Abbott” municipalities to maintain a fixed level of local property tax revenue for their schools, and mandates those cities below that level to pay more for public education.

The basis for this legislative action is the authority granted to the NJ Commissioner of Education in the landmark Abbott v. Burke education equity rulings. In the 1990 Abbott II decision, the NJ Supreme Court found the Abbott property tax rates to be so high that these cities were fiscally incapable of raising any more local funds for their schools, a condition called “municipal overburden.”

In last year’s Annual Appropriations Act — the State Budget – the Legislature took the unprecedented step of defining “municipal overburden” as 120 percent or more of the “State average total equalized tax rate.” The Act further directed the Commissioner to order any Abbott municipality below 120% to increase their property tax rate up to that level, with a limit on the increase of $125 per household. The local property tax increase must then be used to offset state education aid.

Based on this formula, 15 Abbott municipalities were mandated by the Commissioner to increase their local property tax for education for the 2007-08 school year, ranging from $3.5 million in Newark to $217,000 in Perth Amboy. The total property tax increase for these 15 districts is $15,455,629.

“This action by the Legislature is unprecedented and extraordinary,” said David G. Sciarra, ELC Executive Director, “and it exposes the myth that Abbott communities are not paying their fair share for public education.”

Mr. Sciarra noted “Abbott cities are the only municipalities in the Garden State required by the State to maintain a fixed property tax rate for public schools and, if below that rate, increase property taxes to support public education.”

Mr. Sciarra noted that all other municipalities are free to support their public schools with property tax revenue at whatever level they wish, resulting in high property taxes in some towns and very low tax rates in others. “To make school funding more equitable,” said Mr. Sciarra, “the Legislature should extend the policy established for Abbott municipalities and require all towns to generate an appropriate level of support for public education from property taxes. Too many non-Abbott towns are not paying their fair share.”

For more information, contact David G. Sciarra at


Prepared: July 27, 2007

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