The story of property taxes. Lessons “learned” from NJ. Not really of course.

This is a story of cause and effect, of wanting more, but not wanting to pay the price.

Why are NJ property taxes the highest in the nation?

Teachers!

No, that’s not strictly true, but it is the #1 factor.

Powerful public employee unions and politicians willing to appease are not a good mix for taxpayers.

New Jersey has the highest property taxes in the nation, with the average bill reaching a record $10,570 in 2026. This isn’t due to just one factor, but rather a “perfect storm” of high costs, fragmented local government, and a heavy reliance on homeowners to fund essential services.

Here is a breakdown of why the Garden State remains at the top of the list:

1. High Cost of Education (The Biggest Driver)

In most NJ towns, more than 52% of your property tax bill goes directly to local schools.

• High Per-Pupil Spending: NJ consistently ranks among the highest in the country for spending per student.
• Reliance on Property Taxes: Unlike many other states that use a larger portion of sales or income tax to fund schools, NJ relies heavily on local property levies.
• Teacher Salaries & Benefits: The state has some of the highest-paid educators and most generous public employee health and pension benefits in the country, the costs of which are largely passed on to property owners.

2. “Home Rule” and Fragmentation

New Jersey is famous for its “Home Rule” philosophy, which leads to extreme fragmentation:

• Administrative Overlap: The state has 564 municipalities and over 600 school districts.
• Redundancy: Almost every small town insists on having its own police department, fire department, school superintendent, and library. This creates massive administrative overhead and “redundant” salaries that would be significantly lower if services were consolidated at the county level.

3. Public Employee Legacy Costs

New Jersey’s “legacy costs”—the pensions and healthcare benefits promised to retired public workers (including teachers) —are a significant burden.

• Unfunded Liabilities: Decades of underfunding these systems mean that current taxpayers are now paying “catch-up” on these obligations.
• Rising Healthcare Premiums: Even with a 2% state cap on tax levy increases, exceptions are allowed for rising health benefit costs, which have recently outpaced inflation.

4. High Population Density & Infrastructure

Being the most densely populated state in the U.S. comes with high maintenance costs:

• Infrastructure Stress: High density requires more frequent road repairs, more robust public safety (police/fire), and more complex water and sewage management.
• Labor Costs: New Jersey is a high-cost-of-living area, meaning the cost of labor for public works and municipal services is inherently higher than in many other states.

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The pay … In New Jersey, a significant and growing number of teachers earn what are considered high salaries compared to the national average. As of the 2024-2025 school year, the median teacher salary in New Jersey rose to $82,780, which is approximately 15% higher than the national average.

The “high-paid” category is typically defined by those earning six-figure salaries. Here is how that looks across the state:

1. The $100k Club

The number of districts where the median (middle) salary is over $100,000 has increased sharply:

• 2024-25 School Year: 30 school districts now have a median teacher salary exceeding $100,000.

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Are there property tax relief programs? Yup!

While the taxes are high, the state has expanded relief programs to help offset the burden, particularly for seniors:

• Stay NJ: A newer program (with first-quarter 2024 payments starting in Feb 2026) that can provide significant credits for senior homeowners earning up to $500,000 a year^.
• ANCHOR: Provides property tax rebates to both homeowners and renters.
• Senior Freeze: Reimburses eligible seniors and disabled persons for property tax increases.

The big disconnect‼️

All things considered, NJ citizens and the public in general feel teachers are underpaid- as do teacher unions.

Citizens in New Jersey generally believe that public school teachers are underpaid, despite the state having some of the highest nominal teacher salaries in the U.S. This perception stems from high living costs, comparisons to other professions requiring similar education, and ongoing discussions about teacher retention and burnout.

But in true voter fashion the connection between taxes and spending and citizen demands is not made.

Key evidence from recent surveys and reports:

• A 2025 survey by Test Prep Insight (polling over 3,000 respondents nationally, with state breakdowns) found that New Jersey residents believe teachers should earn about $61,447 annually—roughly $18,780 more than the reported average of around $42,667 at the time (though actual averages are higher; this highlights the perceived gap). Teachers ranked as the most underpaid essential profession in the state according to respondents, ahead of postal workers, EMTs, and others. Similar national findings showed Americans wanting teachers paid about $17,000+ more on average.

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