Municipal Tax Abatements
William J. Hughes Center for Public Policy, Stockton University
Abstract
Policy brief examining how New Jersey municipalities grant tax abatements to developers and the implications for revenue distribution to counties, fire districts and boards of education under existing state law.
Overview
New Jersey municipalities can grant tax abatements, which allow for a significant reduction or elimination of property taxes paid to local government by certain types of development projects.
Currently, New Jersey law gives municipalities broad discretion to grant tax abatements; the vast majority of abatements negotiated between municipalities and developers do not provide for any revenue to taxing entities other than the municipal government.
Key Issues
This analysis examines how existing state law does not require municipalities to distribute the revenue derived from abatements as they do regular property taxes collected from other properties within their borders.
This has implications for:
- County governments
- Fire districts
- Boards of education
- Other taxing entities
Policy Context
This policy brief was published as part of “Election 2017: The Policy Priorities of New Jersey College Students” by the William J. Hughes Center for Public Policy at Stockton University.