To help lower its high property taxes, New Jersey should examine school district spending rather than placing a 2.5% property tax levy cap on local governments, a Center on Budget and Policy Priorities report suggested.

The report looks at a recent study done by the Manhattan Institute that found a similar 2.5% cap enacted by Massachusetts in 1980 lowered property taxes while maintaining educational standards.

The CBPP report points out that Massachusetts implemented reforms in 1993 after the state’s Board of Education warned of a state of emergency due to inadequate financial support of public schools.

“Schools suffered in Massachusetts between the adoption of the cap in 1980 and the 1993 education reform,” the report said.

New Jersey’s property tax initiative, called Cap 2.5, does not include education reforms or changes to the system that could help schools reduce expenditures.

The CBPP report says New Jersey spends more than $1,000 more per pupil than Massachusetts on school administration and operations and maintenance, and the state could reduce those costs.

“New Jersey could examine why its costs in these areas are relatively high and require school districts, as a condition of receiving state aid, to make changes in areas found to be out of line,” the report said.

The CBPP analysis also said New Jersey could review its special education expenditures, since some of those students attend private schools outside of their district. New Jersey’s current property-tax increase ceiling is 4%. It has some of the highest property taxes in the U.S.

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