In Your Opinion: Tax Rate Terms Explained

By Deputy Mayor Ram Anbarasan.

As your Deputy Mayor/Councilman At-Large in Franklin and a fellow resident, I meet many people on various occasions. Unsurprisingly, the major concern on everyone’s mind is the high “Real Estate Taxes” they pay to the Township, followed by the “Rising Assessed Value” of their property. Let me try to offer a simple explanation.

It is true that we all send our quarterly tax payments to the Township. But only 13.5 percent of what you send goes to the municipality towards our township’s tax levy, the amount collected to meet our annual budget.  Majority of what you pay, about 62 percent, goes to the school district and the rest goes to the county, open space, library, and fire district taxes. The 13.5 percent municipal tax levy is down from 16.23 percent in 2015 because the municipal portion of the tax bill has grown slower than any other portion.

Tax “Levy” and Tax “Rate” are distinctly different. A tax levy is the total amount of money that a government body collects in taxes to provide services to residents. A tax rate is the percentage of a taxpayer’s property value that is subject to taxation as determined by the Tax Assessor who is empowered by the Constitution of New Jersey to act independently from the Township. So the higher the combined assessed values of all properties (residential and commercial) in town, also known as “Ratables”, the lower the tax rate will likely be.  

Looking back the last 20 years, Franklin’s tax levy in the last eight years has gone up by an average of 0.5 percent per year for a total of only 4 percent from 2015 to 2023. This means our Township budget has even remained lower than inflation rates during this period. As a comparison, the tax levy went up by a whopping 53 percent from 2003 to 2014 for an average of about 5 percent per year in 11 prior years.

According to a report[1] from the NJ Treasury Department, in 2022 following were the “General Tax Rates” in and around Franklin Township (1.970 percent): Bridgewater 2.034 percent, Hillsborough 2.171 percent, Manville 2.616 percent, Millstone 2.038 percent, Montgomery 3.172 percent, New Brunswick 2.489 percent, North Brunswick 6.010 percent, Princeton 2.432 percent, South Bound Brook 2.893 percent, and South Brunswick 3.538 percent. Franklin’s tax rate is the lowest in our region and maybe that is one of the reasons our population grew even more than the State’s growth rate in the 2020 census, making us the 17th largest town in New Jersey.

I may be contacted anytime at 908-581-3188 or by email at councilman.ram@franklinnj.gov or ram.anbar@gmail.com.

[1] https://www.nj.gov/treasury/taxation/pdf/lpt/gtr/2022taxrates.pdf

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