New Jersey somehow manages to be both one of the most taxed states in the country and a state whose rainy day fund would be totally expended if it had to cover normal state expenditures for more than two days.

Let’s unpack that sentence.

New Jersey has the highest property taxes in the country. The Garden State also has the fourth-highest top marginal individual income tax rate. We have the eighth-highest sales tax rate among the 50 states. There’s also an inheritance tax, excise taxes, a real estate transfer tax and a corporate tax.

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Taxed to the Limit: New Jersey Spends and Spends

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The current budget proposal put forth by Gov. Phil Murphy includes hikes in taxes on alcohol, cigarettes, cannabis products, online gambling and sports betting, warehouse truck traffic, drone sales, a doubling of the real estate transfer tax on high-end properties and an expansion of the sales tax to new goods and services.

With all that revenue, we should be in good shape. But we are not.

We have an underfunded state pension system, high bills for state and local employee health insurance, a known structural deficit in our budgets, an inadequate surplus and, as mentioned, the lowest rainy day fund in the nation. We could cover two days of normal operations – two days! – if we had to.

Despite this, the proposed fiscal 2026 budget under consideration in Trenton calls for record spending of $58.1 billion. Both political parties talk about property tax relief. Each would have you believe they are the one to fix things. But the reality is that financial mismanagement has characterized both Democratic and Republican administrations for decades.

Even actions ostensibly taken to slow this seemingly never-ending rise in taxation are undermined in Trenton.

New Jersey has two supposed caps on property tax increases and local appropriations. One dates to the 1970s and one to 2010. But when certain expenses get too high, they are simply moved outside the caps. Take pension payments, employee health insurance and debt service – those are placed outside the jurisdiction of the spending caps.

There is a maximum 3.5% appropriation limit on local budgets. But it doesn’t include payments for pensions, benefits and debt service.

Take another example: the 2% cap on increases in the tax levy imposed by school boards. Cuts in what was known as adjustment aid came over a seven-year period. It was no secret. School districts here and across the state were hurt by the loss of state aid. One of the stated goals was to encourage consolidation of the more than 600 school districts, many with small and declining enrollments.

Now, years later, many districts say they were unfairly harmed by those cuts. They are appealing for increases in the tax levy beyond the state-imposed limits. The state isn’t responding by reinstating the lost funding. Instead, it has established a new program that allows it to impose property tax levy increases without voter approval.

In our own Dennis Township, the school district twice asked voters to approve tax levy increases beyond the cap. Twice, voters overwhelmingly said no. The state has now approved a $1.8 million increase in the tax levy for township schools – regardless of those votes. Property taxes will go up.

Forget, for the moment, the details of the Dennis Township school district’s budget over the years of declining adjustment aid. The takeaway is that caps only work when Trenton wants them to. They can be bypassed without voter authorization when doing so serves Trenton’s interests.

It’s time for major reform – but that requires us, as voters, to elect people with the character and integrity to make real change. We need to make hard choices to reduce the state budget. We don’t need to break spending records every year. And when we talk about cutting the state budget, we don’t mean shifting costs onto local governments.

Reform is possible. But it will only happen when the public demands it.

Quotes From the Bible

“The wise store up but fools gulp down.”  — Proverbs 21:20